Bill Williams Alligator: Reading Trends with Three Smoothed Averages
Summary
The Alligator indicator combines three smoothed moving averages with periods of 5, 8, and 13, named the Lips, Teeth, and Jaw. Their differing speeds and forward shifts create a set of lines that respond at different rates to price movement. The description presents these averages as a way to interpret changing trends and trading ranges.
When the lines spread apart and slope upward or downward, the method treats that as a trending phase in which positions can be held and managed. When they draw together and flatten, it suggests a possible weakening trend and may prompt profit taking or position adjustment. The document gives no backtest or evidence of predictive performance, and these visual patterns do not guarantee a trend will persist or end. Its claim of applicability across instruments and timeframes is not supported with specific results.
Key ideas
- The indicator consists of three smoothed averages with periods of 5, 8, and 13.
- The Jaw, Teeth, and Lips are shifted forward by different amounts.
- Widening, directional separation is interpreted as a trending market.
- Converging, flattening lines may indicate that a trend is losing strength.
- The description offers no performance evidence for these signals.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.