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[Oluti]

Alligator is an indicator designed to signal a trend absence, formation and direction. Bill Williams saw the alligator’s behavior as an allegory of the market’s one: the resting phase is turning into the price-hunting as the alligator awakes so that to come back to sleep after the feeding is over. The longer the alligator is sleeping the hungrier it gets and the stronger the market move will be.

How to Use Alligator Indicator
The indicator consists of 13-, 8- and 5-period smoothed moving averages shifted into the future by 8, 5 and 3 bars respectively which are colored blue, red and green representing the alligator’s jaw, teeth and lips.

The Alligator is resting when the three averages are twisted together progressing in a narrow range. The more distant the averages become, the sooner the price move will happen.

The averages continuing in an upward direction (green followed by red and blue) suggest an emerging uptrend which we interpret as a signal to buy.

The averages following each other in the reversed order down the slope are a strong signal of an unfolding downtrend so selling at this point would be more than appropriate.
Alligator.png
Alligator Indicator Formula (Calculation)

MEDIAN PRICE = (HIGH + LOW) / 2

ALLIGATORS JAW = SMMA (MEDEAN PRICE, 13, 8)

ALLIGATORS TEETH = SMMA (MEDEAN PRICE, 8, 5)

ALLIGATORS LIPS = SMMA (MEDEAN PRICE, 5, 3)

 

[lioralace]

Alright, so here’s the lowdown on the Alligator indicator—yep, the one Bill Williams cooked up. If you’re picturing some reptile lurking in the weeds waiting to snap, you’re actually on the right track. That’s pretty much how this whole thing works: the market’s got moods, kinda like a hungry (or napping) gator.

### What Even Is the Alligator Indicator?

Basically, it’s a mashup of three jazzy-looking moving averages. Each one’s shifted forward—so, they’re not just your basic laggy lines. Williams decided to name them after alligator parts because, I dunno, finance people get bored?

• Jaw (Blue): 13-period smoothed MA, but pushed ahead by 8 candles. That’s your big chompers.
• Teeth (Red): 8-period smoothed MA, moved 5 bars ahead. Ready to bite.
• Lips (Green): Tiny but fierce—5-period smoothing, kicked forward 3.

And, to make ‘em all line up, you don’t use regular price. Nah, you grab the median (middle) price of each bar:
Median = (High + Low) ÷ 2.
Simple, even I can do that math.

### Decoding What This Hungry Gator Is Up To

Alright, so Williams turned the market into a nature doc.

• Sleeping: Lines are tangle up, slurping their own tails—market’s taking a nap, honestly. No trend, sideways action, maybe don’t poke it with a trade just yet.
• Waking Up: Lines start pulling apart, gator yawns—uh oh, probably time for something to happen. That’s your “hey, pay attention!” moment.
• Feeding: Lines are all split, gliding in one direction, gator’s munching for real. Momentum’s here, trends are alive—jump in if you’ve got the guts.

### Spotting Buy or Sell Chances

Here’s where it gets fun:

• Go Long: Green's above red, red’s above blue, and ALL are pointing up. Gator’s headed north with a vengeance—think about buying in.
• Go Short: Green below red, red below blue, all snarling downwards. The market’s got the blues (literally), so consider selling or playing it bearish.

### Why Even Bother With This Thing?

Look, everyone gets faked out by sideways markets; it’s a rite of passage. This alligator circus is handy because those tangled lines mean, “nope, nothing doing.” Once they separate? That’s your cue, my friend. It’s stupidly visual too—even a brand-new trader can eyeball the trend, unless you’re color blind or just hate alligators.

### Gut-Check on How It Works:

Here’s the real math, if you’re into that sort of thing (and, let’s be real, most people just let their charting platform do it):

• Median Price: (High + Low) ÷ 2
• Jaw: Smooth median, 13 periods, shoved 8 bars forward
• Teeth: 8 periods, shifted 5
• Lips: 5 periods, shifted 3

All of ‘em together kind of “lead” the price action, instead of always playing catch-up.

### Bottom line?

If you want something visual, semi-goofy, and actually useful for catching trends (and skipping the snooze-fest of range trading), the Alligator indicator slaps. It’s way more memorable than half the other stuff out there too...plus, now you’ll have a legit excuse to make gator jokes during trading sessions. What’s not to love?