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Gator Oscillator

As we said in the previous article, the gator oscillator is closely tied to the alligator indicator. Although it can be used separately, most often they are combined as they complement each other in giving a more complete overview of current market conditions. It shows the absolute degree of convergence/divergence of the Alligators three moving averages.

Below you can see their combination visualized.

As you can see, the gator oscillator is displayed as a histrogram separated in half by a naught line. In the positive area the indicator plots the absolute difference between the Alligators blue and red lines (jaw and teeth), while the negative zone represents the absolute difference between the Alligators red and green lines (teeth and lips) with a minus sign.

The bars which are formed can be either green or red. A green bar reflects a rise in the difference (the bar is larger than the previous one), while a red bar is formed when the difference declines (the bar is smaller than the previous one).

As with the Alligator oscillator, the Gator also has four different stages of everyday life.

– When the bars on both sides of the naught line are red, the Gator is in the sleeping phase.

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– When one of the sides becomes green, while the other is still red (both become differently colored), the Gator is said to be awakening.

– When both sides become green, thus the absolute difference between the two sets of moving averages grows, the Gator is in its eating phase.

– After the eating phase, when one of the two sides changes color, the Gator is known to be sated, which marks a deceleration in the trend and generally precedes a trend reversal or entering a trading range.

– The cycle is completed when both sides of the naught line turn red, signifying that the Gator has fallen asleep once again.

Because both Gator and Alligator oscillators depend on readings derived from moving averages, they will logically be most effective in trending market conditions. In general, positions are opened as the Gator awakens and are kept through the trends exhaustion phase until both sides of the indicator turn red. A more conservative way to trade is to lock in profits and exit positions in the third phase (gator is sated), when one of the sides turns red. This of course will reduce the return level, but will diminish risk as well.

The Gator oscillator can also be used as a standalone indicator due to its simplicity, since the Alligators three moving averages can clutter your screen, but the two used in conjunction provide a more complete picture of market conditions.

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What Is The Gator Oscillator & How To Trade With It

Bill Williams developed the gator oscillator for his trading strategy based on the principles of the chaos theory. It can give a visually more pleasing interpretation of the alligator indicator, which it is usually used in conjunction with it. The indicator is included in the basic set of technical analysis tools of the MetaTrader trading terminal and, according to Williams, it shows well the “sleep” period, which means the end of the trend, lateral (flat) market movement and the moment when the alligator “wakes up,” that is, the appearance of a new trend on the market. Bill Williams also created the accelerator oscillator and awesome oscillator which help to form his trading strategy template that is readily available in the popular MetaTrader platforms.

What is the Gator Oscillator indicator?

Graphically, the gator oscillator is displayed as two interconnected histograms whose columns are colored green if the previous column is larger than the current and red if less.

Gator Oscillator indicator calculation formula

The indicator calculation is almost completely analogous to the “classic” MACD oscillator with two differences:

  • no signal lines;
  • Added settings for three alligator moving averages.

The gator oscillator calculation formula is as follows:

Histogramm (1) = Abs (SMMA (MedianPrice, 13.8) – SMMA (MedianPrice, 8.5))

Histogramm (2) = (- 1) * Abs (SMMA (MedianPrice, 8.5 ) – SMMA (MedianPrice, 5.3)) SMMA (i) = (Sum (1) – SMMA (i-1)) + MedianPrice (i) / n

SMMA (i) – the value of the smoothed moving average of the current bar (excluding the first);

Sum (1) – the total amount of MedianPrice for n periods, calculated from the previous bar;

SMMA (i-1) – the smoothed value of the moving average of the previous bar;

MedianPrice (1) – average (median) price of the current bar;

SMMA (MedianPrice, 13.8), SMMA (MedianPrice, 8.5), SMMA (MedianPrice, 5.3) – moving averages of the Alligator indicator;

N is the number of periods for calculating the indicator.

The factor “-1” is necessary to display the second histogram in the negative value region.

How to use the Gator Oscillator indicator?

The maximum of the upper histogram coincides with the period of the largest discrepancy between the alligator moving averages, namely the “jaws” (blue line) and “lips” (red line). Accordingly, the minimum of the lower histogram indicates the maximum discrepancy between the “lips” and the “teeth” (green line) of the alligator and will always be negative and below the zero level. The appearance of highs and lows in the histograms means the presence of a strong trend in the market.

The zero level is an important element of the gator oscillator. If the indicator fluctuates around the zero level, this can signal the end of the current trend and a ranging market. Additional confirmation of the lateral movement will be the interweaving of the Alligator lines.

Gator Oscillator with Alligator indicator

Also, by the color and size of the histogram columns, you can easily determine the current “state” of the alligator. Particular attention should be paid to the columns in the areas of highs and lows, which can indicate the presence of a trend. An alligator can be in four states:

  • The alligator “wakes up” – on both sides of the zero level, the histograms are painted in different colors.
  • Alligator “eats” – green columns on both sides.
  • The alligator is “full” – during the “meal” period, red columns appear on one side.
  • The alligator “sleeps” – all columns are red.

Gator Oscillator trading strategy

If using a trend trading strategy, a trader would usually search for market entry points where the gator oscillator columns are increasing in size. An ideal situation would be when only green bars with increasing amplitude appear on the indicator, which indicates the beginning or continuation of a strong buy trend. The opposite would be true (red bars) for a stong sell trend. Some traders will also use the gator oscillator to spot non-trending markets if they want to use a reversal trading strategy.

Gator Oscillator trending market

Let’s take a look at the potential entries in the charts below.

You can sell an asset if you see the complete red column in gator oscillator histogram. Stop loss can be placed slightly above the previous resistance level.

Gator Oscillator sell signal

You may look to buy an asset if you see a complete green column in the gator oscillator histogram. Stop loss can be placed slightly below the previous support level.

Gator Oscillator buy signal

Gator Oscillator indicator conclusion

As with the majority of trading tools used for technical analysis that are based on moving averages, the gator oscillator indicator can be lagging behind actual market movements. With that in mind, the gator oscillator can still be used as an additional tool for quickly and easily determining the trend along with the current state of the alligator indicator without actually applying it to the price chart.

The methods of implementing the gator oscillator indicator into a trading strategy that are outlined within this article are just ideas. I would always ensure that I have good money management, trading discipline and a trading plan when using any forex strategy.

Furthermore, I would combine multiple technical analysis, fundamental analysis, price action analysis and sentiment analysis to filter all entries. You should trade forex in a way that suits your own individual style, needs and goals.

If you would like to practice trading with the gator oscillator indicator, you can open an account with a forex broker and download a trading platform. If you are looking for a forex broker, you may wish to view my best forex brokers for some inspiration.

Wake up to the Market Trend with the Gator Oscillator

The Gator Oscillator is one of several well-known indicators developed by celebrated trader and analyst Bill Williams. It is intended to make it easier for you to recognise when a market is trending, or when it is range-bound. As such, it makes for a useful aid in the timing of your trades. Its ideas expand on those first introduced for one of Williams’ other developments – the Alligator Indicator.

In fact, the Gator Oscillator is designed to work in conjunction with the Alligator Indicator, as a kind of supplementary tool. It’s probably a good idea, then, to quickly recap the three balance lines plotted by that indicator. These are simple moving averages (SMAs) calculated over various time frames for values of the median price (that is: H+L/2). They are calculated as follows:

  • Blue Alligator’s jaw = 13-period SMA shifted 8 bars forward
  • Red Alligator teeth = 9-period SMA shifted 5 bars forward
  • Green Alligator lips = 5-period SMA shifted 3 bars forward

As we shall see below, we can actually set these periods and shifts to custom values of our own choosing in MetaTrader 4, but the classic values are as shown above. The Gator Oscillator formula uses these balance lines to derive values for a dual histogram — the indicator plots two histograms either side of a zero line. While the Alligator Indicator plots its balance lines directly onto a price chart, the Gator Oscillator instead displays the dual histogram separately beneath the price chart.

The positive values are the absolute difference between the Alligator’s jaws and teeth (that is, the blue and red lines). The negative values are calculated as the absolute difference between the teeth and lips (that is, the red and green lines) and then given a negative value, so as to lie entirely below the zero line. When a bar in the histogram is of a greater magnitude than the previous bar, it is coloured green.

When its magnitude is smaller than the previous bar, it’s coloured red. The bars of the Gator Oscillator are intended to make it even easier to recognise different market states compared with the Alligator Indicator. They also serve to confirm what the Alligator Indicator is showing. We’ll discuss how this works a bit further down when we look at trading strategies with the Gator Oscillator.

Using the Gator Indicator in MetaTrader 4

In MetaTrader 4, the Gator Oscillator comes ready-installed as one of the indicators provided as standard. MT4 has a dedicated folder in its ‘Navigator’ for Bill Williams indicators as you can see in the image below:

Source: MetaTrader 4 — Setting the parameters of the Gator Oscillator

This means that you don’t have to make a separate Gator indicator download; as soon as you install MetaTrader 4 on your device, you will have access to the Gator Oscillator. When you launch the Gator Oscillator in MT4, you have the option to set the period values for the jaws, teeth, and lips, as well as the associated shifts. As you can see from the image above, the default values are already pre-populated at the levels originally recommended by Bill Williams. If you want to go ahead with the default values, simply click ‘OK’.

You can, of course, configure these parameters to whichever values you see fit, and as you become more experienced, you might want to experiment with them. When first using the Gator Oscillator, however, it is eminently sensible to use the default values as your starting point. The image below shows what it looked like when we added the Gator Oscillator to a Forex chart for the USD/JPY pair:

Depicted: MetaTrader 4 — USD/JPY 1 Hour Chart with the Gator Oscillator applied — Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

You can see the histogram for the Gator Oscillator plotted as two histograms beneath the main chart. For any one price bar, we have a positive value for the Gator Oscillator above the zero line, and a negative value below the zero line. But how do we actually use this to help us trade?

The Gator Oscillator Trading Strategy

The Gator Oscillator trading strategy ties in closely with the ones that is used for the Alligator Indicator. Bill Williams designed the the Alligator Indicator to be an integrated approach for trading trending markets. It describes when the market is sleeping (range bound), awakening (starting to form a trend) or feeding (continuing to trend). The Gator Oscillator expands on this and describes the four following states:

  • Dormant, or sleeping – absence of a trend in the market
  • Awakening – formation of trend
  • Eating – continuation or persistence of the trend
  • Sated – a warning that the trend may be approaching its end

The Gator Indicator suggests a dormant or sleeping phase when we see both bars either side of the zero line are red. In the Alligator Indicator, this corresponds to when you see the jaw, teeth, and lips are closed, closing, or intertwined. When the Gator is sleeping like this, you should stay out of the market; the indicator is intended for trading only when the market is trending. A dormant, range-bound market, Bill Williams contended, was when you should sit on the sidelines and wait.

The awakening phase is indicated by different colours on either side of the zero line at the same time. This corresponds to the mouth widening in the Alligator Indicator. When the Gator has awoken after sleeping, it is hungry, and this is a time when you should be aiming to enter the market. When the indicator shows green bars either side of the zero line, it suggests the eating phase.

When you see this, the trend is likely to be accelerating, and you should try to run your profits. If we see a solitary red bar crop up after we have been in an eating phase, this is a sign of a sated phase. The trend is close to running out of steam, and you should take action to exit your position as favourably as you can. When bars both above and below the zero line go red, the Gator has gone back to sleep, and the trend is over. You should once again be out of the market, and will now have to await the start of a new trend.

No indicator is perfect, or even close to perfect. You’ve probably noted that the trading strategy above is all about timing, and doesn’t give you direction. Being a trending tool, you will naturally want to be trading in the direction of the forming trend when the Gator awakens. Now, this may be apparent from simply looking at price action on the chart, but if not, you will need another indicator to aid you.

This is a generally wise idea anyway, as pairing up an indicator with another can often help to improve their effectiveness. The Gator Oscillator was intended to be used with the Alligator Indicator, so that is a natural choice. The Alligator Indicator will help indicate direction, but there is no reason you can’t experiment with other indicator combinations to see what works best for you.

Although MetaTrader 4 comes bundled with a number indicators as standard, you might be interested in obtaining a more comprehensive selection of trading tools. If so, you should consider installing MetaTrader Supreme Edition. MTSE is a custom plugin for MetaTrader 4 and MetaTrader 5, designed by industry professionals to allow you to enjoy the ultimate trading experience. It offers additional indicators, as well as a variety of other cutting-edge tools.

The best way to try all these combinations out is with a demo trading account. This allows you to see how your trading strategies play out with live market prices, but keeping all your practice trades risk-free. This means that you can determine for yourself what is most likely to succeed, without risking any money.

The Gator Oscillator Indicator in Summary

The Gator Oscillator uses the convergence and divergence of the three balance lines from the Alligator Indicator to help you identify new trends. It also aids interpretation of how such trends are progressing, and when they might be coming to an end. You should bear in mind that the balance lines used to represent the jaws, lips, and teeth of the Alligator Indicator, from which we derive the Gator Oscillator, are moving averages.

As such, there is inherently some lag involved in the signals provided. The Gator Oscillator, nevertheless, can be useful for distinguishing when to trade, or when to be patient and sit out until a better trading opportunity arises. It’s most effective for trading strongly directional markets, as this is the condition for which Bill Williams intended it to be used. We hope that you’ve found this to be a useful introduction to the Gator Oscillator, and we wish you the best of success in your trading going forward!

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Gator Oscillator helps to visualise the periods when Alligator Indicator lines widen or narrow down.

In order to add Alligator indicator to Metatrader 4 chart:
Go to the upper platform Menu:
-> Insert
-> Indicators
-> Bill Williams
-> Gator Oscillator.

How to trade with Gator Oscillator

The Gator Oscillator histogram above zero shows the absolute difference between blue and red lines of Alligator indicator, while histogram below zero shows the absolute difference between red and green lines.

There are green and red bars on the Gator Oscillator histograms.
A green bar appears when its value is higher than the value of the previous bar.
A red bars appears when its value is lower than the value of the previous bar.

Gator Oscillator helps to better visualize the upcoming changes in the trends: to know when Alligator sleeps, eats, fills out and is about to go to sleep.

Now let’s see what Gator does

— when after sleeping one of the indicator bars is red and the other one is green (either above or below zero)

— when both bars (above and below zero) are green.

— when after eating one of the bars turn red.

— when both bars are red.

By default, Gator oscillator is set with a slight shift forward when displaying oscillator bars.
When working with Gator ocillator in real time, there is no impact/difference, but if to aattemp visual backtesting, such shift would prohibit from making a real evaluation of Gator indicator performance. Therefore, it is recommended to set shift value to zero as shown on the screenshot below:

Gator Oscillator

Gator Oscillator является индикатором, построенным на основе популярного Аллигатора – инструмента аналитики от Билла Вильямса. Он показывает степень расхождения и схождения его линий. Применяется редко. Полезен как дополнительный сигнал к Аллигатору.

  • При расширении линий, а значит, сигналу к покупке/продаже гистограмма индикатора Gator Oscillator тоже начинает расширяться и окрашивается преимущественно в зелёный цвет.
  • Появление красного цвета и его преобладание говорит о том, что тенденция начинает ослабевать. Это ещё не повод для выхода из сделки, но когда красных столбиков гистограммы станет много, и она начнёт сужаться, можно закрывать позицию.

Используйте данный индикатор совместно с Аллигатором, чтобы сделать его сигналы более точными и лучше ориентироваться в том, когда нужно выходить из сделки.

Gator Oscillator

The family of indicators developed by Bill Williams includes Gator Oscillator. The indicator aims to show when the market is trending and it’s in range. The Gator is derived from the Alligator Indicator. It is shown in a separate window below the price chart.

Alligator and Gator work together well. The Gator Oscillator helps to recognize and confirm the information from the Alligator Indicator. In order to use the Gator Oscillator to its full ability, we recommend you to read the information about the Alligator Indicator first.

Williams aimed to simplify analysis. With Gator there’s no need to analyze the distance and divergence between the indicator lines: it’s done automatically. The Gator Oscillator is in the form of a dual histogram with bars above and below the zero line at the same time. The positive values come from the absolute difference between the Alligator’s jaws and teeth (13- and 8-period SMAs), while the negative ones represent the absolute difference between teeth and lips (8- and 5-period SMAs) and then given a negative value. A bar in the histogram is painted green if it is bigger than the previous one and red if it’s smaller.

Gator Oscillator trading strategy

To add the Gator Oscillator to your chart in Metatrader, click “Insert”, choose “Indicators”, «Bill Williams» and then “Gator Oscillator”. You have the ability to change the parameters for jaws, teeth, and lips. The default settings are those that were recommended by Bill Williams and they are perfectly fine for a start. If you want to try other settings, you can also test them.

Like the Alligator that opens its mouth and tries to eat the price, the Gator behaves like a living creature. It has 4 states:

  1. It sleeps – Both bars are red. It means that there’s no trend in the market. This corresponds to the time when the lines of the Alligator Indicator are intertwined. Bill Williams recommends staying out of the market during this time.
  2. It awakes – After sleeping, one bar is green and one bar is red. A trend forms. It’s time to look for the opportunities to enter the market.
  3. It eats – Both bars are green. The trend continues. Keep your trade open and let your profit increase.
  4. It is sated and fills out – After eating, one of the bars is red. It’s a sign that the trend may be approaching its end, so think about taking profit.

Notice that the Gator Oscillator shows only the presence of a trend and not its direction. As a result, it’s better to use it together with the Alligator Indicator or other tools of technical analysis.

Gator Oscillator

Gator Oscillator is based on the Alligator and shows the degree of convergence/divergence of the Balance Lines (Smoothed Moving Averages). The top bar chart is the absolute difference between the values of the blue and the red lines. The bottom bar chart is the absolute difference between the values of the red line and the green line, but with the minus sign, as the bar chart is drawn top-down.






MEDIAN PRICE – median price;
HIGH – maximum price;
LOW – minimum price;
SMMA (A, B, C) – smoothed moving average. Parameter À – smoothed data, Â – smoothing period, Ñ – shift to future. For example, SMMA (MEDIAN PRICE, 5, 3) means that the smoothed moving average is taken from the median price, while the smoothing period is equal to 5 bars, and the shift is equal to 3 bars;
ALLIGATORS JAW – the blue line;
ALLIGATORS TEETH – the green line;
ALLIGATORS LIPS – the red line.

Gator Oscillator: What is it? How to trade it?

The Gator Oscillator (GO) is a technical analysis tool that helps to observe the degree of convergence/divergence of the balance lines. In simple words, it makes it easier for the traders to assess when a market is trending, and when a market is range-bound. Thus, it helps to improve the timing of trades.

Bill Williams first introduced the Gator Oscillator. He was a great technical analyst and trader who developed other tools as well. He developed the GO to expand on one of his other indicators named as the Alligator Oscillator. The Alligator Oscillator plots three balance lines to show its readings. The Gator Oscillator works in combination with the Alligator Oscillator to instantly recap those three balance lines.

How does the Gator Oscillator work?

The Gator Oscillator works as a supplementary tool of the Alligator Oscillator. It helps to recap the following three balance lines plotted by the Alligator Oscillator.

  1. Blue Alligator’s jaw is a 13-period simple moving average (SMA) 8 bar forward
  2. Red Alligator’s teeth is a 9-period simple moving average 5 bars forward
  3. Green Alligator’s lip is a 5-period simple moving average 3 bars forward

The purpose of the GO is to show the degree of convergence/divergence of those balance lines. It shows its reading using two bars, the top bar, and the bottom bar. The top bar represents the difference between the blue jaw and red teeth lines. The bottom bar depicts the difference between the red teeth and the green lip line. The GO calculates and shifts the balance lines into the future according to the amount set by the traders. If the moving averages get plotted on the charts, the jaw will be blue, the teeth will be in red, and the lip will be green. The Gator Oscillator’s bars can be either red or green. A green bar depicts the rise while the red bar indicates a fall. It has also four stages that are also important to know about in order to interpret the indicator.

How go interpret the Gator Oscillator?

The interpretation of the Gator Oscillator demands traders to know about the four stages of the oscillator.

  1. The Gator Oscillator is in sleeping mode when there are red bars on either side of the naught line.
  2. The GO indicator is in awakening mode when one sidebar turns green while the remains red.
  3. The indicator is in the eating phase when there are green bars on either side and hence the difference between the two sets of moving averages also grows.
  4. The Gator Oscillator is a sated mode when one of the two sides turns red again. It generally indicates a decelerating trend and also preceded an upcoming reversal of the trend.

How to trade with the indicator?

The Gator Oscillator is most effective for trading in trending market conditions. Generally, traders open positions when the indicator awakes and keep through the trend exhaustion phase until both sides turn red again. Traders may also follow a more conservative strategy. They can lock in profits and exit their position when the Gator Oscillator is sated. This approach reduces the risk as well as the overall gain.

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Gator Oscillator — Gator: опис, налаштування і застосування

Gator Oscillator будується на основі Alligator і показує ступінь сходження / розходження його ліній балансу (згладжена ковзаюча середня). Верхня гістограма — абсолютна різниця між значеннями синьої лінії і червоної лінії. Нижня гістограма — абсолютна різниця між значеннями червоної лінії і зеленої лінії, але зі знаком мінус, тому що гістограма малюється зверху вниз.

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