Forex Strategy With Alligator Indicator

A typical trend-following strategy composed of an 144 period simple moving average along with the Alligator indicator.

We’re looking to buy or sell currencies into an established trend.

Chart Setup

Indicators: 144 period simple moving average (144 SMA), Alligator (default settings)
Preferred time frame(s): 15 min and above
Trading sessions: Any
Preferred Currency pairs: Any

Download

Download the Forex Strategy With Alligator Indicator for Metatrader 4.

GBP/USD 1 Hour Chart

forex-strategy-with-alligator

The GBP/USD chart illustrates 3 buy signals into an established up trend. Click the chart to enlarge.

Trading Rules

Buy Rules:

  • Criteria #1: Price above the 144 period SMA (established bull trend)
  • Criteria #2: Alligator green line crosses back above the red and blue line from below
  • Criteria #3: Alligator red line crosses back above the blue line from below

Buy the pair.

Stop-Loss: SL Method 1: Place your stop-loss 1 pip below the rising 144 SMA and trail your stop up 1 pip below the 144 SMA. SL Method 2: Place stop below the most recent swing low point in the up trend.

Target: TP Method 1: Risk-to-reward 1.5 or better. TP Method 2: Close the trade when the green Alligator line crosses back below the red line (short-term bearish signal).

Sell Rules:

  • Criteria #1: Price below the 144 period SMA (established bear trend)
  • Criteria #2: Alligator green line crosses below the red and blue line from above
  • Criteria #3: Alligator red line crosses back below the blue line from above

Sell the currency pair.

Stop-Loss: SL Method 1: Place your stop-loss 1 pip above the declining 144 SMA and trail your stop down 1 pip above the 144 SMA. SL Method 2: Place stop above the most recent swing high point in the downtrend.

Target: TP Method 1: Risk-to-reward 1.5 or better. TP Method 2: Close the trade when the green Alligator line crosses back above the red line (short-term bullish signal).

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