Williams Alligator Crossovers with ATR-Based Stop-Losses

Summary

This long-only trend-following system uses the Williams Alligator’s smoothed moving averages, calculated from the midpoint of each bar’s high and low. It enters when the shorter Lips line crosses above the longer Jaw line, and exits when Lips crosses back below Jaw. A 14-period ATR multiplied by two sets a stop below the position’s average entry price, adapting the stop distance to current volatility. The described Jaw, Teeth, and Lips periods are 13, 8, and 5.

The document presents the crossover as a clear, rules-based signal and notes that the indicator may lag and whipsaw in ranging markets. The stop can become wide as volatility rises, and the strategy uses no separate profit target. Although the published settings name BNB/USDT futures over a date range and the source includes commission and slippage assumptions, no performance statistics are given. The source’s rules are long-only despite broader discussion of trading signals, and its stated 100% equity allocation may expose the account to substantial risk.

Key ideas

• A long entry occurs when the Alligator Lips line crosses above the Jaw line.
• A downward Lips-Jaw crossover closes the long position.
• The stop distance is set at two times the 14-period ATR from average entry price.
• Smoothed-average lag and sideways markets can lead to late entries or repeated false signals.
• The source is long-only, has no separate profit target, and provides no reported performance results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.