How to Use the Alligator Indicator in Forex Trading on Olymp Trade Platform?

 

The Olymp Trade platform is a great place for forex traders to get started. One of the benefits of this platform is that it offers a wide variety of indicators that can be used to make predictions about future price movements. One of these indicators is the Alligator indicator. In this blog post, we will show you how to use the Alligator indicator in your own trading.

What is the Alligator Indicator?

The Alligator indicator is a technical analysis tool that was created by Bill Williams. It is designed to help traders identify trend reversals. The Alligator indicator consists of three moving averages that are plotted on the price chart. These moving averages are referred to as the jaws, teeth, and lips of the Alligator. The default setting for the Alligator indicator is 13, 8, and 5. This means that the jaw line is plotted using a 13-period moving average, the teeth line is plotted using an 8-period moving average, and the lips line is plotted using a 5-period moving average.

How to Use the Alligator Indicator in Forex Trading?

There are two main ways that the Alligator indicator can be used in forex trading. First, it can be used to identify potential trend reversals. Second, it can be used as a confirmation tool in conjunction with other technical indicators. Let's take a closer look at each of these uses in turn.

 

As we mentioned earlier, one of the main ways that the Alligator indicator can be used is to identify potential trend reversals. The general idea here is that when the three moving averages converge, it signals that a reversal may be about to take place. Similarly, when the three moving averages diverge, it signals that prices are likely to continue in their current direction.

 

In addition to reversal signals, the Alligator indicator can also be used as a confirmation tool. For example, if you see a candlestick pattern that you think could signal a potential reversal, you can use the Alligator indicator to confirm your suspicion. If you see that the three moving averages are starting to converge, then this provides further evidence that a reversal may indeed be taking place.

Conclusion:

The Alligator indicator is a useful tool for forex traders who are looking for potential trend reversals or confirmations of other technical indicators. If you are new to using this indicator, we recommend starting with small trades and increasing your position size as you become more comfortable with its signals.