Combining Alligator Alignment with a Moving Average for Trend Trades
Summary
This strategy combines three smoothed price averages from the Williams Alligator with a longer exponential moving average. A long position opens when price is above the EMA and the Alligator lines are ordered bullishly; a short position uses the reverse conditions. Positions close when both price and Alligator alignment indicate the opposite direction. Long and short trading can be toggled independently.
The accompanying explanation presents the moving average as confirmation intended to help avoid premature exits during trend fluctuations. It characterizes the approach as suited to assets with strong trends and warns that weak momentum may make it ineffective, describing a low-win-rate, high-reward profile. The script specifies an initial capital of $10,000, 80% of equity per trade, and 0.01% commission. These are configuration details, not reported test results: the document provides no performance statistics or evidence of profitability, and trend filters can lag or whipsaw.
Key ideas
- Long entries require price above the EMA and bullish ordering of the Alligator lines.
- Short entries require price below the EMA and bearish ordering of the Alligator lines.
- Positions close when price and Alligator alignment both point in the opposite direction.
- The description favors markets with strong trends and acknowledges a low-win-rate profile.
- The listed capital, trade allocation, and commission are backtest settings rather than performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.