Alligator, which is also called "the Crocodile Market", is an indicator that was created by a professional trader named William S. "Old Bill" Williams. He was born on January 3, 1787 in Horse Creek, North Carolina, United States.
During his life he served as registrar and border guards. On the sidelines of his job, he began to develop an indicator to facilitate his work, in which the indicator can detect the movement of the enemy from the border. Indicator which is the forerunner to the Alligator indicator, which is currently used by traders in trade transactions. Williams once said, "... the market (the market) has a structure that's messy. If we can understand the structure then we can reap huge profits."
Williams died at the age of 62 years, when the soldiers were ambushed and killed by Ute in 1849 Prior to that, he returned to Taos to help trace the expedition team is stuck ice on Mount Sangre.
To preserve it, was made a 8 foot high monument is made of bronze with the title "Bill Williams Monument Park" near the park Arizona, United States. Monument was established in 1980 by Pettit BR, nationality American citizens. Bill Williams' life as a member of Osage (border guards)
In principle, Alligator made of 3 Moving Averages (MA), among which are:
1 MA called Blue colored "Jaw Alligator" (Jaws Period: 13 Shift: 8)
Describing the current market conditions at the time the current frame we use. Example: when we use TF D1
2 MA Red color called "Alligator Teeth" (Teeth Period: 8 Shift: 5)
Describe the market conditions at the fifth time frame MA Blue. Example: if earlier we use TF D1, then the fifth TF is TF H1
3 MA Green color is called "Alligator Lips" (Lips Period: 5, Shift: 3)
Describe the market conditions at the fifth time frame MA Red. For example, if the red MA as TF H1, then at the green MA is an overview of the TF M5.
Third Air-MA method: Smoothed; Apply: Median price HL / 2. If there is a trend buy the candle is on top of the Alligator's mouth, while the trend in case of sell the candles are on the bottom of the mouth of the Alligator.
Alligator indicator is an indicator of the characteristics of the group "Langging", where it goes to bring up the signal when the price has moved, or in other words the signal that appears more slowly than the price in the candlestick. Traders use this indicator as a compass to see if the market is in a state trending or sideways.
The parameters of the method consists in the Alligator 13, 8, and 5, but the author would recommend:
1 MA blue: 8
2 MA Red: 5
3 MA Green: 3
The reason the change in MA, because much smoother and faster than the signal indicating default on Alligator innate metatrader.
The advantages of the Alligator indicator is:
1 Able to detect the momentum of a market
2 could mark the end of a trend
3 Simple
Can be used on all 4 pairs and time frames
5. can protect the entry of non-trending market
Disadvantages of Alligator indicator is:
1 Signal can not be used on the sideway
2 Late
You can see an example of the Alligator indicator that the setting has been modif, below:
Conclusion
Alligator indicator can be used to determine trends, both long-term trends and short-term. Even so, you need to be vigilant and carefully considering the Alligator indicator is a lagging indicator that additional indicators are needed in the transaction, such as RSI.
