Alligator explained

Trend

What Alligator measures

The Alligator, created by Bill Williams, uses three smoothed moving averages of different lengths — the Jaw (13-period), Teeth (8-period) and Lips (5-period), each shifted forward in time — to visualize whether a market is trending ("awake and eating") or ranging ("asleep"). The metaphor: when the three lines are tangled together, the alligator is sleeping; when they fan out in order, it has woken up and is feeding on a trend.

How Alligator readings are interpreted

When Lips, Teeth and Jaw are tangled and overlapping, the market is ranging/consolidating — a low-opportunity period for trend strategies. When the lines separate and align in order (Lips above Teeth above Jaw for an uptrend, or the reverse for a downtrend), a genuine trend is underway and typically has room to continue.

Conventional Alligator levels

Lines tangled/overlapping: ranging market, avoid trend-following entries
Lips > Teeth > Jaw, spreading apart: confirmed uptrend, "alligator eating"
Lips < Teeth < Jaw, spreading apart: confirmed downtrend
Lines beginning to converge again after a trending spread: trend may be losing steam, alligator "getting full"

Where Alligator works, and where it does not

Designed as a market-regime filter first and a trend-direction tool second — its main job is telling you WHEN to apply trend-following methods, not just which direction. Works on any timeframe, part of Bill Williams' broader trading system alongside the Awesome Oscillator and Fractals.

Indicators commonly read alongside Alligator

Awesome Oscillator: Bill Williams' own system pairs Alligator regime confirmation with AO's zero-cross for entry timing
ADX: Both answer "is this trending," from different calculation approaches — agreement adds confidence
Fractals: The original system uses Fractal breakout points for entries once the Alligator confirms a trend is underway

Known limitations of Alligator

Reading line order and spread is inherently more visual/pattern-based than a single clean number
Like other multi-moving-average systems, it lags at the very start of a new trend while the lines are still separating
The forward-shift applied to each line means the most recent bars can look different once new data confirms the shift

Alligator in practice

Tangled lines are conventionally read as an absence of trend, where trend-following approaches perform poorly
Trend-following readings are conventionally given weight only once the lines have clearly separated and aligned in order
Combine with the Awesome Oscillator's zero-cross for entry timing once the Alligator confirms the regime
A useful screener filter: identify tickers where the Alligator has just started separating from a tangle — potential early-stage trends

Other trend indicators

ADX — Average Directional Index
Supertrend
Ichimoku Cloud
Aroon Indicator

Testing ideas built on Alligator

A reading of Alligator can be written as an exact rule and checked against historical data — as a full strategy with entries, exits and costs, or as a single condition and what followed it:

How to backtest a trading strategy without code
Event analysis: what follows a market event

Plot it yourself. Add this indicator to a chart, change every parameter and watch the line move, then backtest how the rule would have behaved on historical data — free on the S&P 500 ETF, no card.

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This is reference material, not advice. It describes what each indicator measures and how its readings are conventionally interpreted. Nothing here is a recommendation to buy or sell anything, and no indicator predicts future prices. GU Analyser is an analytical tool — no money is ever traded here.