Alligator Indicator

The main stated purpose of the Alligator indicator is to provide clear signals of a trend - and so reduce the probability of trading in a range-bound market - less effective, less pips, more losses….
The basis of the Alligator, as often, is moving averages. It’s possible to use simple, exponential or smoothed, but the standard recipe is : -

• Alligator Jaw line (blue) - 13-period moving average at the mid price (High+Low)/2, offset forwards 8 time units
• Alligator Teeth line (red) - 8-period moving average at the mid price (High+Low)/2, offset fowards 5 time units
• Alligator Lip line (green) - 5-period moving average at the mid price (High+Low)/2, offset forwards 2 time units.

The image is of an alligator asleep = market is range-bound, no clear trend.
While alligator awake = trend is forming.
If the three lines are entwined, tangled, close together, the Alligator is asleep. When they spread out, separate, diverge from each other, the Alligator has woken up - and it’s time to make trades.Once fed, the Alligator will go back to sleep again, line converge and it’s time then to close trades, and (hopefully) take profits.
Here’s an example on a bullish trend:

And which way to go - buy or sell? The Alligator has an answer for that : Price is above the Alligator’s mouth (all 3 lines) = an uptrend, bullishPrice is below the Alligator’s mouth = a downtrend, bearish.
Here’s an example of the Alligator in action on a bearish trend.

As you can see, the Alligator does indeed wake during the course of a trend, and go back to sleep when over. What the Alligator doesn’t do, in my experience, is wake up very quickly, and so often (not always) isn’t the indicator to identify the start of a trend.