This Forex Momentum Trading Strategy is a trend momentum strategy based on Alligator and Double CCI Indicator. This is a intraday system thaty work also with binary options High/Low.
The Alligator is as much a metaphor as it is an indicator. It consists of three lines, overlaid on a pricing chart, that represent the jaw, the teeth and the lips of the beast, and was created to help the trader confirm the presence of a trend and its direction.
The Alligator indicator can also help traders designate impulse and corrective wave formations, but the tool works best when combined with a momentum indicator.
The “traits” of the Alligator are numerous. If the three lines are entwined, then the Alligator’s mouth is closed and he is said to be sleeping.
As he sleeps, he gets hungrier by the minute, waiting for a breakout from his slumber when he will eat.
When the trend takes shape, the Alligator wakes and starts eating. Once satiated, the Alligator closes his mouth once again and goes to sleep.
The Alligator indicator is common on Metatrader4 trading software, and the calculation formula sequence involves these straightforward steps:
- The Alligator’s Jaw, the “Blue” line, is a 13-period Smoothed Moving Average, moved into the future by 8 bars;
- The Alligator’s Teeth, the “Red” line, is an 8-period Smoothed Moving Average, moved by 5 bars into the future;
- The Alligator’s Lips, the “Green” line, is a 5-period Smoothed Moving Average, moved by 3 bars into the future.
The Alligator indicator helps the trader stay in the position for a longer period and works best the longer the period of sleep. In the above example, you would stay in the trade until a Candle closed above the middle Red line.
Williams also developed a “Gator” histogram indicator to help visually with interpretation, and many other traders have added their own “twist” to enhance the reliability of this indicator.
Best Time Frame : 15 min or higher.
Markets : Indicies (S&P 500, Dax, Dow Jones, FTSE, Nasdaq), Commodites (Gold, Silver and oil) and Forex Majors.
- Alligator confirming buy
- BBands Stop Alert blue dots
- Pet-D green bar,
- Double CCI histogram green,
- RSI>55 level.
- Alligator confirming buy,
- BBands Stop Alert red dots,
- Pet-D red bar,
- Double CCI histogram red,
- RSI<45 level.
At the level of support/resistance or with profit target ( 9-14 pips).
Initial Stop loss at the previous swing after 8 pips in gain move stop loss at -2 pips or breakeven level.