I tested the alligator indicator 200 times and got one of the most unexpected win rate results.
You see, I have tested the alligator indicator 100 times in the previous testing series.
It got around a 50% win rate with a 1.5-to-1 reward-risk ratio.
In other words, it made a good profit.
But this time, I took another 100 trades in an extremely good market to see how high the win rate can go.
And I took another 100 trades in an extremely bad market to see how low the win rate can go.
And I got one of the most unexpected results.
This is what the alligator indicator looks like.
It has three lines that look like a moving average.
On this chart, the blue line is called the jaw of the alligator.
The red line is called the teeth of the alligator.
And the green line is called the lips of the alligator.
If you add two alligator indicators to the chart, then they are called alligators, with an s.
Once they start a family and your chart gets filled with alligators, run for your life.
But in all seriousness, the alligator indicator has been one of my favorite indicators because it shows a lot of useful things.
If the alligator lines are far away from each other, then the trend is moving strongly.
If the alligator lines are closer to each other, the trend is slow.
If the green lip line is above the blue jaw line, then there is upward momentum going on.
And if the green lip line is below the blue jaw line, then there is downward momentum going on.
The strategy we are going to test 200 times works something like this.
First, we add the 200-period moving average to see the long-term trend direction.
If the price is above it, it’s an uptrend.
If the price is below it, it’s a downtrend.
In an uptrend, we take a long entry when the green lip line crosses above the blue jaw line.
The entry is at the closing price of the candle that made the alligator crossover.
The closing price has to be above all the alligator lines and also above the 200-period moving average.

The stop loss goes on the other side of the alligator lines, something like this.
I set the profit target at 1.5 times the stop-loss distance or used a 1.5-to-1 reward-risk ratio.
For the extremely good and extremely bad market tests, I used the Gold/USD chart.
Since it has been moving in an excellent uptrend for a long while, I only took long trades on it.
I added a 9-period EMA.
I drew red boxes where the price was not clearly trending above the 9 EMA, was ranging slowly, or was choppy.
I filtered the market like this on the one-day time frame.
For the extremely good market test, I took one hundred trades where I didn’t draw the red boxes.
And in the extremely bad market test, I took one hundred trades where I drew the red boxes.
I took trades with the alligator indicator on the 30 minutes entry timeframe.
When I tested the alligator indicator in the extremely good market, this is what happened.
You see, in the “extremely good market” series, strategies so far have increased their win rate by a good amount.
I mean, strategies that had a win rate of less than 50% in the previous “mostly good market” test also increased their win rate by a good amount in the “extremely good market” test.
But this alligator must be on a diet or something because even in the “extremely good market” test, its performance was not that good.
It lost six trades in a row and won seven trades in a row.
The profit graph went in the upward direction, but it was slower than other strategies we have tested so far.
It also had a decent amount of drawdown, or a pullback, in between.
Remember that this is the “extremely good market” test, where we expect almost all strategies to perform really well and get a really high win rate.
But this alligator was so shy that it just couldn’t perform that well.
It got around a 53% win rate, which is above the 40% breakeven win rate.
So the strategy definitely made some money, as you can see on the profit graph.

But since it gave around a 50% win rate in the previous “mostly good market” test, it only managed to improve the win rate by like 3% in the extremely good market.
That is kind of pathetic.
I mean, the Bollinger Bands strategy that we also tested in the same “extremely good market” had a much bigger improvement.
But if this strategy is performing badly in the extremely good market, how badly can it perform in the extremely bad market?
Well, when I tested the alligator indicator in the extremely bad market, I was surprised.
The profit graph started to move in the downward direction pretty much from the start.
On top of that, it had a massive 12-trade losing streak.
The win rate dropped below 30% many times.
And at the end, it got a 32% win rate, which is much lower than the 40% breakeven win rate.
And since the profit graph is continuously going in the downward direction, you have a much higher probability of blowing up your account with this strategy when the market gets bad.
In comparison, the Ichimoku strategy had a much better win rate in the same extremely bad market.
You will have a much better chance of not blowing up your account with the Ichimoku strategy, even when the market conditions get bad.
You should be scared of the alligator in the bad market.
It will eat your account.
Now it’s time to give it a TR score, or the Trading Rush score.
Honestly, this strategy was a bit difficult to rate.
In the previous “mostly good market” test, this alligator strategy had a pretty good TR score overall compared to other strategies we tested in that series.
But this time, in the “extremely good market” test, it gets a 6.8 out of 10, which is actually the lowest win rate score so far in this extreme testing series.
The “easy to use” score stays at 6.5, just like it was in the “mostly good market” test.
As for reliability, it got a 6 out of 10 because even though the win rate didn’t get that high like other strategies, the indicator is pretty reliable.

It shows useful things and gives pretty good entries.
In the “consistency of profit” category, it gets a 6.5 out of 10, which is also the lowest score so far in the good market.
It gets another low score of 7.5 out of 10 in the “quality of trades” category.
Because of so many low scores, the total TR score ended up at 33.3.
The highest score we have seen so far is 38.8.
All strategies we have tested in the extremely good market got a better score than the alligator.
In the extremely bad market, the “easy to use” score stays the same at 6.5.
The “consistency of profit” score is 0 because it doesn’t make any profit.
And the win rate, reliability, and the quality of trades get a 3.3 out of 10.
That brings the TR score in the bad market to 16.4.
That is the lowest score so far.
Basically, this alligator indicator performs pretty well in the “mostly good market.”
It doesn’t perform that well in the extremely good market compared to other strategies.
And it performs worse than other strategies in the bad market.
Some of the testing data in this extreme series has surprised me.
So, let’s see what other strategies can give some interesting results as we test more.
Thanks for watching.