Forex Alligator Strategy For Metatrader 5

The Forex Alligator strategy for Metatrader 5 is a fascinating trading system that deals with spotting the right market trends and truthfully sticking to it.

We have designed this strategy to help currency traders confirm the presence of a trend and its direction, either up or down.

You’ll be able to enter the market at the start of a strong movement and hold the position before such movement burns out.

As with all forex strategies, none is 100% effective and same applies to the Forex Alligator strategy.

There are periods in which false signals arise but winning signals are usually consistent enough to make profits in the long-term.

Trade Setup 

MetaTrader 5 Indicators: Alligator.ex5 (Parameters Modified; Jaws period=15, Teeth period=10, Lips period=7), macdonrsi.ex5 (Default Setting)

Trade Style: Any (scalping, day trading, swing trading)

Trading Sessions: Any

Currency Pairs: Any

Platform: Metatrader 5 (MT5)

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Buy Trade Example: USDCHF, H1 Chart

Fig. 1.0

Trading Strategy Rules For Buy and Sell Trades Explained

Buy Entry

Enter a buy trade if the following trading conditions are met:

  1. If the green line of the Alligator Metatrader 5 forex indicator crosses above the slower lines (red & blue) as depicted on Fig. 1.0, price is said to be pushed to the upside i.e. a trigger to go long on the stipulated currency pair.
  2. If the histograms (blue violet & dodger blue) of the macdonrsi custom indicator break and hoverabove the 0.00 center level (see Fig. 1.0), the market is said to be in entering a bullish state, therefore a buy trigger will suffice.

Suggested Stop Loss for Buy Entry: Place stop loss below immediate support.

Suggested Exit Strategy/Take Profit for Buy Trade

Exit the buy trade if the following trading conditions are met:

  1. If price closes below the blue line of the Alligator custom indicator during a bullish trend, it is pointing to bullish trend exhaustion, as such an exit or take profit is rightly advised.
  2. If the macdonrsi forex indicator displays a magenta histogram while a bullish trend is running, a bearish reversal is said to be looming, as such an exit or take profit is duly recommended.

Sell Entry

Open a sell trade if the following trading conditions are met:

  1. If the green line of the Alligator custom indicator crosses below the slower lines (red & blue) as seen on Fig. 1.1, price is said to be dragged lower i.e. a trigger to go short on the designated forex pair.
  2. If the histograms (magenta & Indian red) of the macdonrsi forex indicator break and hover below the 0.00 horizontal level as exemplified on Fig. 1.1, the overall market sentiment is said to be bearish i.e. a trigger to sell the selected currency pair.

Suggested Stop Loss for Sell Entry: Place stop loss above immediate resistance.

Suggested Exit Strategy/Take Profit for Sell Entry

Exit the sell trade if the following trading conditions are met:

  1. If price closes above the blue line of the Alligator MT5 indicator while a bearish trend is ongoing, it is signaling weaning bears power, as such an exit or take profit is duly recommended.
  2. If the macdonrsi custom indicator displays a dodger blue histogram during a bearish signal, a bullish reversal is said to be on the horizon, as such an exit or take profit stance is apt.

Sell Trade Example: USDCHF, H1 Chart

Fig. 1.1

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MT5 Trading Indicators Used For This Strategy

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 MT5 Alligator indicator.

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

The macdonrsi MT5 indicator is a MACD histogram that is built on the core of the RSI smoothed oscillator.

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