In Forex, we know of the bulls and bears but, alligators? Yes, alligators.
The alligator indicator is designed to determine the presence or absence of a trend and the trend’s direction.
For an uptrend, all three lines must be in their appropriate position, jaws at the bottom (blue), teeth in the middle (red), then lips on the top (green).
The opposite is true for a down trend: the jaws on top (blue) the teeth in the middle (red), and the lips at the bottom (green).
The Personality of the Alligator
If you did not know, alligators sleep a lot. They hang out by the river bank, napping, dreaming about eating hundreds of fish, deer, donkeys, and whatever else it can find.
After sleeping, an alligator can be hungry. When an alligator finally wakes up, it is ready to prey on some poor inferior animals.
The market can be described in a similar fashion. Sometimes the market can be ranging and ranging and ranging and then finally, BOOM! Break out!
The alligator indicator can show us when the trend is birthed.
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