Alligator Forex Signal Trading Strategy

The Alligator Forex Signal trading strategy is designed to add some bite to your trading.

The use of two indicators within the strategy is to try and shore up weak spots within each indicator.

This is done to assist in reducing the false signals that might arise during the sleeping phase of the alligator-signal-indicator and possibly improve the timing of the trading alerts.

The logical approach to this strategy is to use it as a short and medium term trading system.

The bigger the timeframe used, the more difficult it is for price to break through the Alligator, as such trading signals are seldom generated.

The accompanying examples will help shed more light on the trading rules.

Chart Setup

MetaTrader4 Indicators: alligator-signal-indicator.ex4 (Inputs Parameter Modified; Jaws Shift=8,Teeth Shift=5, Lips Shift=3), ravi.ex4 (Defualt Setting)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour

Recommended Trading Sessions: Any

Currency Pairs: Any pair

Download

Download the Alligator Forex Signal Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

  1. If the red upward pointing arrows of the alligator-signal-indicator pops up within the activity chart as depicted on Fig. 1.0, price is said to be pushed to the upside i.e. a trigger to go long on the designated currency pair.
  2. If the gray & green histograms of the ravi Metatrader 4 forex indicator stack up above the zero center level as illustrated on Fig. 1.0, the overall market sentiment is said to be bullish, therefore a trigger to go long on the selected forex pair.

Stop Loss for Buy Entry: Place stop loss below the most recent support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from all trades if the following rules or conditions takes precedence:

  1. If the alligator-signal-indicator pops up a blue downward pointing arrow while a bullish trend is ongoing (see Fig. 1.0), bulls power is said to be weaning, therefore an exit or take profit is recommended.
  2. If the ravi custom indicator displays a gray histogram that is positioned below the zero center level, price is said to be making a likely U-turn, hence an exit or take profit is advised.

Sell Entry Rules

Go short if the following setups gets displayed successfully on the activity chart:

  1. If the blue downward pointing arrows of the alligator-signal-indicator pops up on the activity chart as exemplified on Fig. 1.1, price is said to be pressured lower i.e. a trigger to go short on the currency pair of interest.
  2. If the gray & red histograms of the ravi indicator gets positioned below the zero center level as seen on Fig. 1.1, the general market sentiment is said to be bearish, therefore a trigger to go short on the designated fx pair.

Stop Loss for Sell Entry: Place stop loss above the most recent resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If the alligator-signal-indicator pops up a red upward pointing arrow during a bearish trend (refer to Fig. 1.1), bears power is said to be halting, therefore an exit or take profit is advised.
  2. If the ravi custom indicator displays a gray histogram that is positioned above the zero center level, price is said to be making a likely bullish reversal, hence an exit or take profit will suffice.

Sell Trade Example

Fig. 1.1

Free Download

Download the Alligator Forex Signal Trading Strategy

About The Trading Indicators

The alligator-signal-indicator.ex4 is a modified Bill Williams indicator.

The indicator is comprised of three lines that are overlaid on the activity chart.

The lines represent the jaw (blue line), the teeth (red line) and the lips (green line) of the Alligator.

Traders tend to use this indicator to gauge trend and its probable direction.

Ravi is an MT4 indicator that deploys two moving averages computed in percent.

The indicator has been tweaked to show strong bullish trends using its green colored histograms, while strong bearish trends are labelled red.

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