Forex Alligator And Candlesticks | A Forex Trading and Techniques Blog

Alligator Indicator:

In Forex we have many technical indicators in which Alligator is one of them. Its a combination of three moving averages. The blue line is a 13-period Smoothed Moving Average, moved into the future by 8 bars. The red line is 8-period Smoothed Moving Average, moved by 5 bars into the future. The green line is a 5-period Smoothed Moving Average, moved by 3 bars into the future. These 3 moving averages form the forex alligator indicator.

If you are using Meta Trader as your forex platform, you can find it in the navigator window under custom indicators. When the three moving averages of the this forex indicator are very close together, that means the forex market is very volatile or there is no trend at all. When the three moving averages are very wide apart and they are moving either up or down that means the forex market is trending.

forex Metatrader Alligator

Candlestick Patterns:

We have many candlestick patterns in forex. The following are the main patterns that I look for, when I do forex trading.

Engulfing Pattern: Engulfing pattern is the best pattern, I believe in forex trading. In engulfing pattern one candlestick body completely occupies the other candlestick body. There are two types in this.

Bullish Engulfing Pattern: In this pattern the bearish candlestick(red candle stick in the picture – price has decreased in that particular time frame) is completely occupied by the bullish candlestick(white candlestick in the picture – price has increased in that particular time frame). This is a buy signal for forex traders.

Bullish Engulfing Candlesticks

Bearish Engulfing Pattern: In this pattern the bullish candlestick(white candlestick in the picture – price has increased in that particular time frame) is completely occupied by the bearish candlestick(red candle stick in the picture – price has decreased in that particular time frame). This is a sell signal for forex traders.

Bearish Engulfing Candlestick Pattern

Doji Pattern: Doji is candlestick with a relatively small body or no body at all compared to the total height of the candle stick.

Forex Doji Candlestick

Alligator and Different Candlestick Patterns:

Technique1: When the three moving averages are wide apart and they are up or down that means the forex market is trending. Wait until the forex market retraces back and touches any of the three lines. When it touches any of the three moving averages, check if it forms the engulfing pattern. Once it forms an engulfing pattern and the candlestick is completed then enter the trade in that direction.

For example in a down trend, wait for the bearish candlestick pattern at any of the moving averages. Check it in the picture. Its a GBPUSD trade on . The moving averages are started widening and the trend is downwards. After some time the forex market retraced back to the second moving average line. It formed an engulfing pattern there. Once the candlestick is completed its a good point to enter the forex trading at that point.

Bearish Candlestick Formation In a Downtrend

In an uptrend, wait for the bullish candlestick pattern at any of themoving averages. Check it in the picture. The moving averages started widening and the trend is upwards. After sometime the forex market retraced back to the first moving average line. It formed an bullish engulfing pattern there. Once the Candlestick is completed its a good point to enter the forex market at that point.

If you are using metatrader as your forex platform, check now to see how it is working.

Bullish Candlestick Formation in Forex Uptrend

Technique2: When the forex market is trending up or down, wait until it retraces back to any of the three moving averages. Once it retraced back check if it forms a doji. If a doji is formed wait for the next candlestick. If the next candlestick is in the direction of trend after a doji, then we can enter the forex market after the candlestick is completed.

In the following picture the trend is downwards.

After sometime the market retraced back and it formed a doji at the first moving average line. After the doji is formed, the next candlestick is in in the direction of trend. so we can enter the trade after the candlestick is completed.

Doji Formation in a forex downtrend

In the following picture the trend is upwards. After sometime the market retraced back and it formed a doji at the first moving average line. After the doji is formed, the next candlestick is in the direction of trend. So we can enter the trade after the candlestick is completed.

Doji formation in a forex uptrend

The following are some of the examples for forex alligator and bullish and bearish engulfing candlestick formations for different currency pairs at different times.

USDJPY Forex Alligator Uptrend Bullish Engulfing Candlestick Pattern

Uptrend Bullish Engulfing Candlestick Pattern

USDCHF Forex Alligator Uptrend Bullish Engulfing Candlestick Pattern

Downtrend Bearish Engulfing Candlestick Pattern

EURUSD Forex Alligator Downtrend Bearish Engulfing Candlestick Pattern

The following are some of the examples for forex alligator and doji candlestick formations for different currency pairs at different times.

Downtrend Doji Candlestick Formation

USDCHF Forex Alligator Downtrend Doji Candlestick Formation

Downtrend Doji Candlestick Formation

USDCAD Forex Alligator Downtrend Doji Candlestick Formation

Down And Uptrends Doji Candlestick Formation

EURUSD Forex Alligator Down And Uptrends Doji Candlestick Formation

Note: This technique may not work in asian market timings. This works very good during the New York timings and before the asian market starts.

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Alligator and Candlesticks Forex Techniques

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