
The alligator was first described by Bill Williams in his book New Trading Dimensions. There are three smoothed moving averages using 13, eight, and five periods and shift them by eight, five, and three bars into the future. The longest period line is blue (the alligator's jaw), the middle one is red (the alligator's teeth), and the shortest one is green (the alligator's lips). According to Williams, when these three moving averages are twisted together, it means the alligator indicator rests, and so we also rest. But the longer the alligator sleeps, the hungrier it is. So when the alligator awakes after a good, long rest it is very hungry to hunt for food. And its food is price. For example: when all three lines are aligned, going up one after another with the green being greater than red being greater than blue, prices are in an uptrend. You need to look into the possibility of buying (opposite to sell).
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