Williams Alligator

Parameters: jaw_period = 13 (10–30) • jaw_shift = 8 (5–15) • teeth_period = 8 (5–20) • teeth_shift = 5 (3–10) • lips_period = 5 (3–15) • lips_shift = 3 (2–8)

Overview

The Williams Alligator indicator was created by Bill Williams, an American trader and psychologist, and described in his 1995 book "Trading Chaos." The indicator consists of three smoothed moving averages set at five, eight, and 13 periods (all Fibonacci numbers), which are metaphorically named after an alligator's anatomy and behavior patterns.

The indicator's unique approach involves forward displacement of these moving averages to reduce false signals and provide clearer trend identification. When the three lines are intertwined, the alligator is "sleeping" (no trend), and when they spread apart, the alligator is "awakening" and "eating" (trending market), making it an intuitive visual tool for traders.

Interpretation & Trading Signals

Market States & Trading Phases:

  • Sleeping Alligator: Lines intertwined - no trend present, avoid trading or use range strategies
  • Awakening Alligator: Lines begin separating - trend starting to form, prepare for entries
  • Eating with Mouth Wide Open: Lines widely separated - strong trend, maintain positions
  • Sated Alligator: Lines converging - trend ending, take profits and exit

Entry Signals:

  • Buy Signal: Green Lips cross above both Red Teeth and Blue Jaw - strong uptrend starting
  • Sell Signal: Green Lips cross below both Red Teeth and Blue Jaw - downtrend beginning
  • Confirmation: Perfect line order without crossing indicates sustainable trend
  • First Cross: Initial Lips/Teeth cross after sleep period often marks trend start

Exit Strategy & Risk Management:

  • Exit Signal: Lines converging or crossing opposite to entry - alligator becoming "full"
  • Trend Weakness: Lines coming together suggests current pattern weakening
  • Enhanced Approach: Combine with MACD or RSI for confirmation in 2025 markets
  • Lagging Nature: Remember signals are delayed due to smoothing and forward shift

Example Usage

Code examples will be available once the Rust implementation is complete.

Performance Analysis

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