Alligator iTrend Forex Trading Strategy

The market is comprised of an array of technical tools that can be confusing for some traders.

It is not wise to have too many indicators on a single chart, due to chances of getting conflicting signals, a scenario that can be harmful to any market participant.

The Alligator iTrend forex trading strategy has been carefully formulated to deliver an easy chart view when scanning for high probability buy and sell trade signals.

Chart Setup

MetaTrader4 Indicators: Alligator.ex4 (Default Setting), i_Trend.ex4 (Inputs Variable Modified; Band_Period=50)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day

Recommended Trading Sessions: Any

Currency Pairs: Any pair

Download

Download the Alligator iTrend Forex Trading Strategy  

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy order if the following indicator or chart pattern gets put on display:

  1. If the blue line of the Alligator MT4 indicator intersects its lime and red line bottom up, while price bars are seen to be somewhat above, the prevalent market sentiment is said to be bullish, hence a signal to go long on the selected fx pair.
  2. If the lime green line of the i_Trend.ex4 custom indicator cuts through the red line to stay above as seen on Fig. 1.0, price is said to be taken higher i.e. a signal to buy the stipulated currency pair.

Stop Loss for Buy Entry: Place stop loss 3 pips below short-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If while a buy signal is ongoing, price closes below the blue line of Alligator MT4 indicator, an exit or take profit is recommended.
  2. If the lime green line of the i_Trend.ex4 custom intersects the red line top downward as shown on Fig. 1.0, it is a signal to exit or take profit at once.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the blue line of the Alligator MT4 indicator intersects its lime and red line top downward, while the candlesticks are seen to be slightly below, the prevalent market sentiment is said to be bearish, hence a signal to go short on the designated fx pair.
  2. If the lime green line of the i_Trend.ex4 custom indicator cuts through the red line to stay below as illustrated on Fig. 1.1, price is said to be driven lower i.e. a signal to sell the currency pair of interest.

Stop Loss for Sell Entry: Place stop loss 3 pips above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a sell signal is running, price closes above the blue line of Alligator MT4 indicator, an exit or take profit is advised.
  2. If the lime green line of the i_Trend.ex4 custom intersects the red line bottom up (refer to Fig. 1.1), it is a signal to exit or take profit forthwith.

Sell Trade Example

Fig. 1.1

Free Download

Download the Alligator iTrend Forex Trading Strategy

The Alligator is an indicator by Bill Williams, introduced in 1995.

The indicator is comprised of three lines that are overlaid on the activity chart.

The lines represent the jaw, the teeth and the lips of the Alligator.

Traders tend to use this indicator to gauge trend and its possible direction.

The i_Trend.ex4 is also trend following custom indicator, but built within its indicator window, comprising of two lines (red and lime green), that overlap each other to yield trading signal.

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