Coppock Alligator Forex Trading strategy

The Coppock Alligator forex trading strategy is built with an outlook to stay in the currency market for as long as possible because it is able to follow through on long-term trends.

Having said that, the strategy consists of a unique blend of indicators that are poised to deliver good trading results.

On the list is the Coppock and the Alligator MT4 indicator that are used to possible trend reversals and identify the absence of a trend respectively.

Chart Setup

MetaTrader4 Indicators: Alligator.ex4 (Parameters Modified; Jaws period=26, Teeth period=12, Lips period=7), Coppock.ex4 (Inputs Variable Modified; RPeriod1=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

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

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

  1. If the blue line of the Alligator MT4 indicator cuts through the lime and red lines in a bottom up fashion with price staying slightly above (refer to Fig. 1.0), price is said to be taken higher i.e. a trigger to buy the stipulated currency pair.
  2. If the red histograms of the Coppock custom indicator aligns above the 0.00 level as seen on Fig. 1.0, price is said to be pushed higher, hence a trigger to go long on the designated forex 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 center stage:

  1. If the blue line of the Alligator MT4 indicator fully cuts above the red & lime lines of the Alligator indicator as seen on Fig. 1.0, an exit or take profit is advised.
  2. If the red histograms of the Coppock indicator readjust to form below the 0.00 level while a buy signal is ongoing, an exit or take profit is said to be recommended.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the blue line of the Alligator MT4 indicator intersects the lime and red lines in a top downward manner with price trading slightly below as depicted on Fig. 1.1, price is said to be driven lower i.e. a trigger to sell the designated forex pair.
  2. If the red histograms of the Coppock custom indicator aligns below the 0.00 level as seen on Fig. 1.1, price is said to be pushed lower, hence a trigger to go short on 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 the blue line of the Alligator MT4 indicator fully cuts below the red & lime lines of the Alligator indicator as shown on Fig. 1.1, an exit or take profit will suffice.
  2. If the red histograms of the Coppock indicator readjust to form above the 0.00 level while a sell signal is running, an exit or take profit is duly advised.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The Coppock custom indicator is a technical study that is built on three different Moving Averages i.e. Exponential, Linear Weighted, and Simple Moving Averages as it traces trend along on the chart.

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.

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