How can you predict whether the trend will be bullish or bearish when using the Alligator indicator?

Predicting the direction of the trend with the Alligator indicator in a given financial market is very simple, this if we consider that when the three lines move away from each other denotes a strong trend in the market either bullish or bearish, in the following I will explain how based on the design of the three moving averages that make up the Alligator indicator can predict the direction of the trend.

In line with what was mentioned in the previous paragraph, predicting the direction of the trend using the three moving averages of the Alligator indicator is not so complex, because, when the direction of the trend is upward, the three lines of the Alligator indicator, besides moving away from each other, do it in the following way; the green line (lips) is placed above the other two lines, leaving the red line (teeth) in the middle and the blue line (jaw) at the bottom.

To exemplify how to predict the direction of the uptrend using the three moving averages of the Alligator indicator, observe in the following chart the price action of the ADA/USDT pair, note how the price overlaps above the three lines, also note how the green line is located in the upper segment, the red line in the middle, and the blue line in the lower segment, action that predicts a potential uptrend direction.

Now, when the direction of the trend is downward, the three lines of the Alligator indicator also tend to move away from each other, but this time they do it in the following way; the blue line (jaw) is placed above the other two lines, leaving the red line (teeth) in the middle, and the green line (lips) at the bottom.

To exemplify how to predict the direction of the downtrend using the three moving averages of the Alligator indicator, observe in the following chart the price action of the SLP/USDT pair, note how the price failing to make new higher prices presents weakening, and begins to be located below the three lines of the Alligator indicator, also note how the blue line is located in the upper segment, the red line in the middle, and the green line in the lower segment, action that predicts a potential downward direction.

In the following post I will explain how the Alligator indicator can be used to understand buy/sell signals by analyzing their different movements.

ForexTraders The alligator strategy – how to use the Alligator in forex trading. Link