Concept
Alligator
Alligator is a Trend concept. The Library holds 2 implementations, each one a working definition you can pull into Quant.
Bill Williams
Top Alligator indicators
2 total
What is the Alligator?
The Alligator is Bill Williams' three-line trend tool from the mid-1990s. It plots three smoothed moving averages of median price (high plus low, divided by two), each displaced into the future: the Jaw, 13 periods shifted 8 bars forward; the Teeth, 8 periods shifted 5; and the Lips, 5 periods shifted 3. The smoothing is the slow Wilder-style variety (an RMA-type average), and the forward shift draws each line ahead of the bars that produced it.
Williams' metaphor carries the interpretation. When the lines braid together the alligator sleeps and the market is in a trading range; when Lips cross above Teeth and Teeth above Jaw and the lines fan open, the alligator eats and a trend is running; when the lines converge again the animal is sated and the move is likely spent. In Williams' full method, entries come from Williams Fractals breaking beyond the open mouth.
How traders use it
- As a trend filter: longs are considered only while price holds above an upward-fanned mouth (Lips over Teeth over Jaw), shorts the mirror image, and nothing while the lines are entangled.
- As an entry trigger in Williams' method: a fractal breakout beyond the Teeth, taken in the direction the mouth is opening.
- As a trailing exit reference: positions ride until price closes back through the Lips or Teeth, or the lines knot again, which is read as the feeding phase ending.
Related concepts · Trend-following systems
Concept family
Trend
100 concepts mapped · 88 in the Library
Alligator FAQ
What are the standard Alligator settings?
Bill Williams' published settings are smoothed moving averages of median price, meaning high plus low divided by two: a 13-period Jaw shifted 8 bars forward, an 8-period Teeth shifted 5, and a 5-period Lips shifted 3. The displacement draws each line ahead of the bars that computed it. The values are Fibonacci numbers, but they are conventions, not optimized parameters.
What does it mean when the Alligator is sleeping?
Sleep is when the three lines flatten and intertwine: the 5, 8, and 13-period averages agree there is no net directional progress, so the market is ranging. Williams taught standing aside during sleep because signals inside the knot whipsaw. He also argued that longer sleeps precede stronger moves; treat that as his claim about markets, not a guarantee.
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