Alligator

Most of the time the market does not move anywhere. Just 15–30% of all time the market forms some trends and the traders, who are not in the trading room, make their profit by the trend movements. My grandfather often said: «Even a blind chicken will find a corn if you feed it the same time every day». We call the trend trading «blind chicken market». Although, it took us several years to work out an indicator, which allows to «keep the gunpowder dry» until we reach the «blind chicken market».

Bill Williams

Alligator technical indicator - is a combination of Balance Lines (Moving Averages), they use fractal geometry and nonlineal dynamics.

Blue line (Alligator's jaw) - is a Balance Line for the temporary period, which is used for graph construction (13-period smoothed moving average advanced by 8 bars ahead)

Red line (Alligator's teeth) - is a Balance Line for a significant timeframe which is one level lower (8-period smoothed moving average advanced by 5 bars ahead)

Green line (Alligator's lips) - is a Balance Line for a significant timeframe one more level lower (5-period smoothed moving average advanced by 3 bars ahead).

Lips, teeth and jaws point to interaction of different time periods. The market trends can be distinguished only during 15–30% of time, and in the rest time you have to follow the trends and do not operate in the markets changing only within certain price periods.

Alligator is going to sleep or sleeping already if the jaw, teeth and lips are closed or interlaced. While Alligator is sleeping his hunger is getting stronger, the longer he sleeps the more hunger he will be when he will wake up. The first thing he does is yawning and opening its Jaw. After that he feels the smell of food - it is bull or bear's meat, and he begins hunting, after a little while Alligator eats his fill and losses appetite, i.e. during this time the Balance Lines come together, it is the time to start fixing the profit.