Using the Alligator indicator as a filter to eliminate unnecessary and false signals
As I have mentioned in previous posts, no technical analysis tool is perfect, so, to increase our chances of success the ideal is to use more than one indicator in our trading strategies, hence, in fact I consider it necessary to add other indicators for the indicator to work better as a filter and help eliminate unnecessary and false signals.
Now, in my opinion, one way to improve the accuracy of the Alligator indicator is by combining it with the indicator that serves to identify and confirm the "true" breaks, therefore, the Alligator indicator can be combined with the Rate of Change Indicator or ROC for its acronym in English.
As an example note in the following chart that in the price action of the TRX/USDT pair a resistance breakout occurs, note how after a resting phase the green Alligator Indicator line rises above the other two lines (wake-up phase) action revealing a clear buy signal.
This behavior can be confirmed with the help of the ROC indicator, as before the price action starts to rise and makes a sudden breakout notice how the ROC indicator anticipates and starts to move above the zero (o) line in a bullish direction, which confirms the direction of the trend and increases our probability of success when deciding to execute a market entry.
SOURCES CONSULTED
ForexTraders The alligator strategy – how to use the Alligator in forex trading. Link
OBSERVATION:
The cover image was designed by the author: @lupafilotaxia, incorporating image: TradingView
Hi dear friend @lupafilotaxia
This analysis is very good, I have days without trading when I return I will take this indicator into account.
God bless you
Hi @ramsesuchiha
It is simple to use. Thanks for leaving your comment.
Best regards, be well.
Technical analysis is good, profitable and at the same time requires deep understanding before use. Alligator indicator in combination with the ROC is indeed a good pair to have a successful trading through valid signals.
Thanks for the wonderful article.
Hi @benie111
It is simple to use, and the best thing is that it helps to filter out false signals.
Best regards, be well.
Hi
The current crypto market is in a downtrend and though there are opportunities but since it is a downtrend so one needs to be very smart and nimble footed.
So when you say
Hi @thetimetravelerz
Correct in the current bearish context we must be smart and agile to be able to avoid losses and capitalize some extra income, the good thing about the indicator is that it helps to filter false signals.
Best regards, be well.
Hello dear friend@lupafilotaxia.
The current cryptographic market is in a downward trend, and that is why it is good to know the technical analysis, since they are profitable because they would allow us to operate more calmly and be able to invest our economic income.
Greetings and thanks for your article.
Hi @sandracarrascal
Thanks for leaving your comment, indeed knowing some guidelines of how the market behaves and the price action will help us to avoid losses and capitalize some extra income.
Best regards, be well.