Alligator Indicator Tutorial - How To Trade Forex

This indicator is named Alligator because its behavior is similar to that of an alligator. An Alligator indicator consists of three parts: teeth, jaws and lips. This indicator is used to help traders determine market movements and make decisions. Or you can use it to find the right time to enter the market.

On the price chart, the Alligator indicator is a set of 3 SMMAs:

+ Jaws (blue line) = SMMA (average price 13.8).

+ Teeth (red line) = SMMA (average price 8.5).

+ Lips (green line) = SMMA (average price 5.3).

Each shape of the Alligator indicator on the price chart tells us a unique state of the market.

1. When the 3 SMMA widens and rises and the alligator's jaws open and gape, the market is in an uptrend.
2. When the 3 SMMA widens and falls, the market is in a downtrend.

Each shape of the Alligator indicator on the price chart tells us a unique state of the market.

Although its operation is simple, the signals given by the Alligator indicator are very accurate in predicting the upcoming trend. This is why Alligator is very popular with trend traders.

Here I will guide you on how to use the Alligator indicator to find effective Forex trades. Please stay tuned and follow to verify the effectiveness of the Alligator Indicator.

This is quite a risky trading strategy when the order opening signal is based on the Alligator indicator only. However, if the price goes according to your prediction, the profit will be maximum. You will catch the first waves in a new trend.

You open an order as follows:

Open a BUY order using the Alligator indicator:

• Entry point: When the 3 SMMA widens and heads higher. Alligator jaws open and point upwards.
• Stop-Loss: At the nearest support level before the price rebound.
• Take Profit:you should take profits when the price reaches resistance levels that have formed in the past.

Open a sell order using the Alligator indicator:

• Entry point: when the 3 SMMA widens and heads down. Alligator jaws open and point down.
• Stop-Loss: At the nearest resistance level before the price drops again.
• Take-Profit: You should take profit when the price reaches the support levels that were formed in the past.

With this trading strategy, your orders are a little safer. You will use the Alligator indicator to confirm an ongoing trend before opening an order. However, this trading strategy requires you to wait patiently. You should wait for the price retest when a trend occurs.

Open a BUY order when the Alligator indicator signals an uptrend (the 3 SMMAs extend and head higher) as follows:

• Entry Point: when the new test appears. The price will retest the support (which is the former resistance) after breaking out to form an uptrend.
• Stop-Loss: At the nearest support level before the new price tests
• Take-Profit: You should take profit when the price reaches resistance levels that have been formed in the past.

Open a sell order when the Alligator indicator signals a downtrend (the 3 SMMAs extend and head down) as follows:

• Entry Point: when the new test appears. The price will retest the resistance (which is the former support) after breaking out to form a downtrend.
• top-Loss: At the nearest resistance level before price
• Take-Profit: You should take profit when the price reaches the support levels that were formed in the past.

Above is just a basic Forex trading guide to get familiar with the Alligator indicator. Do open your demo account in any forex trading terminal like MetaTrader and try to use Alligator indicator there.

Alligator Technical Indicator explained with chart images - when to buy, sell, book profit