Alligator

The alligator is a technical indicator which is based on a set of successful systems and tactics and was developed by the well-known trader-theorist, Bill Williams. Three evened-out moving averages with different periods are combined on one graph so to make the median price. The Alligator received its name from the similarity the pattern has with that of the reptiles. As such, the parts of the Alligator’s body are split into three constituent parts: teeth, jaws and lips. The behaviour of each part helps the trader understand the market dynamic and make corresponding decisions based on such interpretation. It is believed that the alligator indicator is the most useful when making preparations for optimal market entry, when trying to assess the power of the trend or setting Stop Loss orders.