Alligator Forex Strategy For Scalping And Day Trading

The Alligator Forex strategy for scalping and day trading is a very simple trend following trading system that works on all time frames and pairs.

The strategy allows traders spot the main trend, and by so doing, scalping and day trading signals can be adequately carried out on a variety of time frames.

One massive advantage for using this strategy is its ability to manage positions without overlapping into the next trading day.

The strategy minimizes the risk of sharp price fluctuations during the day’s trading session.

MT4 Chart Setup

MetaTrader4 Indicators: Alligator.ex4 (Parameters Modified; Jaws period=18, Teeth period=13, Lips period=10), MACD_Signals.ex4 (Default Setting), i_Trend.ex4 (Inputs Variable Modified; Bands_Period=36)

Trade Recommendations

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

Trading Sessions: any

Currency Pairs: any pair + Gold

Trade Style: scalping, day trading

Download

Download the Alligator Forex Strategy For Scalping And Day Trading

Buy Trade Example: NZD/CAD (New Zealand Dollar / Canadian Dollar), M5 Chart

Fig. 1.0

Strategy

Buy Trade Setup

Open a buy trade when the following conditions are met:

  • The blue line of the Alligator indicator should be crossing below its red and lime lines in a bottom up manner indicating a bullish trend.
  • The MACD_Signals indicator should be printing fire brick and sky-blue histograms above the zero-horizontal level indicating a bullish trend reversal.
  • The lime green line of the i_Trend indicator should be crossing above the red line indicating a bullish trend.

Stop Loss

Set the stop loss below the blue Alligator line.

Take Profit

  • Close the buy trade as soon as the red line of the Alligator indicator intersects the lime line.
  • Alternatively, close the trade for a predetermined profit target, for example exit the buy trade for +20pips TP on the 5-minute time frame, or if the MACD_Signals indicator prints a fire brick or sky blue histogram below the zero-horizontal level.
  • Then again, close the trade as soon as the lime-green line of the i_Trend indicator intersects the red line.

Sell Trade Example: NZD/CAD (New Zealand Dollar / Canadian Dollar), M5 Chart

Fig. 1.1

Sell Trade Setup

Open a sell trade when the following conditions are met:

  • The blue line of the Alligator indicator should be crossing above its red and lime lines in a top downward manner indicating a bearish trend.
  • The MACD_Signals indicator should be printing fire brick and sky-blue histograms below the zero-horizontal level indicating a bearish trend reversal.
  • The red line of the i_Trend indicator should be crossing above the lime green line indicating a bearish trend.

Stop Loss

Set the stop loss above the blue Alligator line.

Take Profit

  • Close the sell trade as soon as the red line of the Alligator indicator intersects the lime line.
  • Alternatively, close the trade for a predetermined profit target, for example exit the sell trade for +20pips TP on the 5-minute time frame, or if the MACD_Signals indicator prints a fire brick or sky blue histogram above the zero-horizontal level.
  • Then again, close the trade as soon as the lime-green line of the i_Trend indicator intersects the red line.

Free Download

Download the Alligator Forex Strategy For Scalping And Day Trading

About The Forex Technical Indicators Used

The Alligator is an indicator by Bill Williams, introduced in 1995, the indicator is comprised of three lines that are overlaid on the activity chart.

The lines represent the jaw, the teeth and the lips of the Alligator.

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

The MACD_Cross custom indicator is a modified Moving Average Convergence/Divergence oscillator that offers the best for both momentum and trend following, by deploying the signal line crossover mechanism.

The i_Trend custom indicator is a trend following system that is wrapped within an indicator window, comprising of two lines (red and lime green), that overlap each other to yield trend signals.

Share Now!