You have been using the William Alligator indicator all wrong.

There’s a better way to utilize this tool, making your trading outcomes significantly better.

And we are not even joking.

Here’s proof of what it could accomplish.

At the end of this blog, you’ll find a link to the strategy.

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The Flaw of the Original William Alligator Indicator

If you’ve used the William Alligator Indicator before, you might have noticed its tendency to trigger exits prematurely, causing you to miss out on extended market trends. This can be frustrating, especially in fast-moving markets.

Here’s How We Made it Better

Our refined approach blends the traditional configurations of the William Alligator setup with an added Moving Average indicator. This enhancement serves as a robust trend confirmation tool, facilitating more reliable backtesting result.

For Long Positions:

• Entry Signal: Initiate a long order when the price ascends above the Moving Average with the Alligator lines spreading and pointing upward, confirming a bullish market trend. Stay in the trade even if the Alligator suggests a potential reversal.
• Exit Signal: Close the position once the price drops below the Moving Average and the Alligator aligns downward, indicating a bearish shift.

The logic and conditions for short orders are the same but in the opposite direction.

Exiting later only when the price dips below the moving average allows traders to fully capitalize on the entire uptrend. This approach prevents premature exits and eliminates the struggle of finding a new entry point, especially when the price accelerates rapidly without offering clear re-entry opportunities.

This strategic move ensures that traders maximize gains from substantial market movements, staying aligned with the trend until a definitive reversal is confirmed.

Ideal Application

This strategy does not work in all timeframes and assets. It is particularly effective for highly volatile assets like Bitcoin and Ethereum, known for their sharp price movements and distinct trends.

It’s its nature to have a lower win rate but substantial rewards for those successful trades, highlighting the importance of selecting the right assets.

Link to this strategy:
Alligator-MA Trend Catcher on TradingView

Feel free to modify the script and share your own improvements on top of this.

Additional Resources

We also offer a variety of free indicators and a premium indicator available for trial at no cost.

If you appreciate our strategy and insights, please help us grow by following our page and trying out our indicators.

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Disclaimer: The information provided in this article is for educational purposes only and should not be considered as financial advice. Trading involves risk, and it is important to conduct thorough research and seek professional guidance before making any investment decisions. Prospective investors are encouraged to perform their own due diligence or consult a financial advisor before making investment decisions.

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