The BB Alligator Stop forex trading strategy uses the alligator indicator to provide you with great entries in the most profitable trend while keeping your risks at a minimal level.
Well, let’s see how it all plays out:
Chart Setup
MetaTrader4 Indicators: BBands_Stop_BO.ex4 (Inputs Variable Modified; Length=25), Alligator (Default Setting), BBWin.ex4 (Default Setting)
Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day
Recommended Trading Sessions: Any
Currency Pairs: Any pair
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Buy Trade Example
Fig. 1.0
Strategy
Long Entry Rules
Enter a buy in the market if the following indicator or chart pattern gets put on display:
- If the blue line of the Alligator MT4 indicator intersects the lime and red line bottom up with price trading above (refer to Fig. 1.0), a buy signal is said to be looming.
- If the Chartreuse dotted line of the BBands_Stop_BO.ex4 custom indicator is seen below the candlesticks as depicted on Fig. 1.0, price is said to be pushed to the upside, hence a buy trigger is in the offing.
- If the red line and black histograms of the BBWin.ex4 custom indicator break and stays above the 0.00 level as shown on Fig. 1.0, a buy signal is imminent.
Stop Loss for Buy Entry: Place stop loss below medium term support.
Exit Strategy/Take Profit for Buy Entry
Exit or take profit if the following rules or conditions takes precedence:
- If while a buy trend is ongoing, price is seen to close below the blue line of the Alligator MT4 indicator as shown on Fig. 1.0, an exit or take profit is advised.
- If an orange dotted line of the BBands_Stop_BO.ex4 custom indicator gets aligned above price bars, it is a signal to exit or take profit on open position(s).
- If the red line of the BBWin.ex4 custom indicator break below the 0.00 level during a bullish trend, an exit or take profit is recommended.
Sell Entry Rules
Enter a sell order if the following holds true:
- If the blue line of the Alligator MT4 indicator intersects the lime and red line top downward with price trading below (check Fig. 1.1), a sell signal is said to be on the horizon.
- If the orange dotted line of the BBands_Stop_BO.ex4 custom indicator is displayed above the candlesticks as seen on Fig. 1.1, price is said to be taken lower, hence a sell trigger is in the cards.
- If the red line and black histograms of the BBWin.ex4 custom indicator break and stays below the 0.00 level as depicted on Fig. 1.1, a sell signal is forthcoming.
Stop Loss for Sell Entry: Place stop loss above medium term resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit if the following takes center stage:
- If while a bearish trend is running, price is seen to close above the blue line of the Alligator MT4 indicator, an exit or take profit will suffice.
- If a Chartreuse dotted line of the BBands_Stop_BO.ex4 custom indicator gets placed below price bars, it is a signal to exit or take profit forthwith.
- If the red line of the BBWin.ex4 custom indicator jumps above the 0.00 level during a bearish trend, an exit or take profit is advised.
Sell Trade Example
Fig. 1.1
Free Download
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About The Trading Indicators
The BBands_Stop_BO.ex4 is a trend indicator and a modified Bollinger Bands.
The indicator finds its use in the gauging trend change, along with setting stop orders.
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 BBWin.ex4 custom indicator is an indicator that is made up of Bollinger Bands indicator along with trend lines in a separate window.