The Hidden Predator of Forex: How Williams Alligator Unlocks Trend Following Success

Why Most Traders Get Eaten Alive (And How to Avoid It)

Picture this: You’re in the jungle of Forex trading. You see a juicy setup—looks promising, right? You take the trade. Then, boom! The market whipsaws, and you’re left wondering why your “trend” reversed like a bad sequel no one asked for. Sound familiar?

The problem isn’t just your strategy—it’s when you’re using it. Enter Williams Alligator, a game-changing indicator designed to separate real trends from choppy traps.

What is the Williams Alligator? (And Why Should You Care?)

Developed by Bill Williams, the Alligator Indicator helps traders determine trend direction, strength, and entry points. It consists of three moving averages:

• Jaw (Blue Line): A 13-period smoothed moving average, shifted 8 bars forward.
• Teeth (Red Line): An 8-period smoothed moving average, shifted 5 bars forward.
• Lips (Green Line): A 5-period smoothed moving average, shifted 3 bars forward.

Each part of the Alligator represents different phases of the market:

• Sleeping: When the lines are intertwined, signaling consolidation.
• Waking Up: The lips (green line) cross above or below the other lines.
• Eating: The Alligator is hungry—this is where trends break out.
• Satisfied: When the lines begin to converge again, hinting at trend exhaustion.

The Alligator’s Secret: Why Trend Following Works Like a Charm

Most traders make the fatal mistake of forcing trades in ranging markets. The Williams Alligator filters out the noise and lets you ride the real waves.

Here’s the Ninja Strategy You Need:

1. Identify When the Alligator Wakes Up – Look for the green line (Lips) to cross above or below the red and blue lines.
2. Confirm With Price Action – Check if price is breaking previous highs or lows.
3. Enter on the First Retracement – Instead of chasing price, enter on a pullback to the green or red line.
4. Ride The Trend Until The Alligator Gets Full – As long as the lines are spread apart, stay in the trade.
5. Exit When the Alligator Starts to Sleep – When the lines start converging, take profits or tighten your stop.

Real-World Case Study: How a Pro Trader Used The Alligator to Predict a Massive Trend

In 2023, professional trader John Carter spotted a classic Alligator setup on EUR/USD. The market had been ranging for weeks, but suddenly, the green line crossed above the red and blue lines, signaling trend activation. Instead of jumping in immediately, Carter waited for a pullback to the teeth line (red) and entered long.

Result? A 450-pip rally over the next two weeks.

This is how pros use the Williams Alligator—not to guess trends, but to confirm and ride them.

Why Most Traders Get It Wrong (And How You Can Fix It)

Mistake #1: Trading When The Alligator is Sleeping

• If the moving averages are tangled, step back—there’s no trend!

Mistake #2: Entering Too Late

• If the lines are already far apart, you’re chasing. Wait for a retracement.

Mistake #3: Ignoring Market Structure

• Always combine the Alligator with support/resistance zones and trendlines.

Advanced Hack: Combining The Alligator With Other Indicators

Want to take your trend-following game to the next level? Try this:

• Williams Alligator + RSI – Look for RSI confirmation above 50 (for longs) or below 50 (for shorts).
• Williams Alligator + MACD – Wait for a MACD crossover in the same direction as the Alligator’s wake-up signal.
• Williams Alligator + Fibonacci Retracements – Enter on a retracement to the 38.2% or 50% level.

Final Thoughts: How to Master Trend Following With the Alligator

If you’ve been struggling to catch trends, stop fighting the market. The Williams Alligator shows you when the market is ready to move—and more importantly, when it’s time to step aside.

Key Takeaways:

• The Williams Alligator helps traders identify real trends and avoid false breakouts.
• Always wait for confirmation before entering a trade.
• Exit smartly when the lines start converging—don’t overstay your welcome!
• Combine with RSI, MACD, or Fibonacci for extra confluence.

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Image Credits: Cover image at the top is AI-generated