The Williams Alligator indicator displays 3 moving average lines on the chart, and are called the lips, teeth, and jaw (from top to bottom). When the price is above all 3 lines in that specific order, and moving upwards in parallel with each other, it is considered bullish. When the price is below all 3 lines in the opposite order (jaw, teeth, and lips from top to bottom), and are moving downwards in parallel, it is considered bearish.
With this strategy, the long entry will be when the Williams Alligator is in bullish mode, and the exit will be when the lips crosses below the jaw. Similarly, the short entry will be the opposite, when bearish mode occurs, and the exit will be when the lips crosses above the jaw.
Williams Alligator strategy for the SPY on the 4hour timeframe
Results
Testing this strategy on the SPY has returned the following profit factors:
- 1min: 0.961
- 5min: 1.164
- 15min: 1.211
- 30min: 1.059
- 1hour: 0.964
- 4hour: 0.786
- 1day: 1.206
- Average: 1.095
This strategy works best on the 15 minute and daily timeframes, with the worst results on the 4 hour. Remember, different ticker symbols can provide different results.
TradingView Script
Try the Williams Alligator strategy for yourself on TradingView: https://www.tradingview.com/script/HsFsiRh1-Williams-Alligator-backtestx/
Test with your own tickers and timeframes to see how well it works!