Williams Alligator Jaw Crossovers with Percentage-Based Exits

Summary

This trend-following strategy enters long when price crosses above the Williams Alligator Jaw line and short when it crosses below. The document defines the Jaw, Teeth, and Lips using moving averages with different lengths and forward offsets, though the trading signal uses the Jaw alone. It also describes percentage-based stop loss and take profit exits, with adjustable parameters. The supplied backtest settings specify an ETH futures market and a historical period, but no performance results are presented.

The document identifies whipsaws in ranging or volatile conditions and lag from moving-average signals as key limitations. Fixed percentage exits may also fit poorly across different volatility regimes, while extensive parameter tuning can overfit historical data. Suggested extensions include confirming signals with the other Alligator lines, using volatility-based exits, filtering by broader trends, and adjusting position size to risk. These are proposed improvements rather than tested findings; the material does not establish whether the base rules or suggested changes are profitable.

Key ideas

• A price cross above the Alligator Jaw signals a long entry, and a cross below signals a short entry.
• The strategy defines Jaw, Teeth, and Lips lines with different moving-average lengths and offsets.
• Percentage-based stop loss and take profit exits are included as adjustable controls.
• Whipsaws, signal lag, fixed exit levels, and parameter overfitting are identified as risks.
• The backtest settings are stated, but no results verify the strategy's performance.

Tags

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