The Alligator technical indicator is a combination of Balance Lines (Moving Averages) that use fractal geometry and nonlinear dynamics. The three Balance Lines are known as the Jaw, the Teeth, and the Lips.The blue line (Alligator’s Jaw) is the Balance Line for the time frame that was used to build the chart (13-period Smoothed Moving Average, moved into the future by 8 bars);The red line (Alligator’s Teeth) is the Balance Line for the value time frame of one level lower (8-period Smoothed Moving Average, moved by 5 bars into the future);The green line (Alligator’s Lips) is the Balance Line for.To ensure that the Balance Lines are based on the same input data, Bill Williams has applied Smoothed Moving Averages (SMA).
The main purpose of using fractal geometry and nonlinear dynamics is to enhance the accuracy of predictions (see examples below). To show any deviation from the trend, it is necessary to use a special “trigger” or “semi-trigger” line. This line is built separately from other Balance Lines and shows whether such a deviation exists.
