What is the gator method?

The gator method is a trading strategy developed by trader Bill Williams. It is based on the Alligator indicator, which consists of three lines that represent the jaw, teeth, and lips of an alligator. The jaw is a blue line that represents a 13-period Smoothed Moving Average shifted 8 periods into the future, the teeth is a red line that represents an 8-period Smoothed Moving Average shifted 5 periods into the future, and the lips is a green line that represents a 5-period Smoothed Moving Average shifted 3 periods into the future.

The gator method uses the interactions between these three lines to identify potential trading opportunities. When the three lines are intertwined and moving closely together, it indicates that the market is in a ranging or consolidating phase. When the lines are diverging from each other, it indicates that the market may be trending.

Traders can use the gator method to enter trades when the lines are diverging and confirm their entry when the lines start to converge again. Additionally, the gator method can help traders identify potential trend reversals when the lines start to cross over each other. Overall, the gator method is a useful tool for traders looking to identify trends and trade in the direction of the market.