MACD alligator Archives

Is Alligator with MACD Trading Strategy even worth Trading? I took 100 trades with MACD combined with the Alligator Indicator, the same way a lot of you have been requesting. Use the Alligator to identify and filter the range market, and use the MACD crossover as the entry signal. Since taking the trade at every MACD signal is not such a good idea, we will use the Beep Boop Indicator that we created on the Trading Rush Channel, which is based on the MACD indicator, and will filter some of the false MACD signals in the slow markets. Since the Beep Boop and Alligator Trading Strategies gave good win rates on their own, it will be interesting to see what will happen if we combine Beep Boop with the Alligator indicator.

When you combine the Beep Boop Indicator with the Alligator Indicator, the strategy looks something like this.

When the Alligator Indicator is showing an uptrend above the 200 period moving average, buy when the Beep Boop Indicator turns green and gives a buy signal. Stoploss goes below the pullback.

When the Alligator Indicator is showing a downtrend below the 200 period moving average, sell when the Beep Boop Indicator turns red and gives a sell signal. Stoploss goes above the pullback.

In the long setup, the entry candle has to be completely above all the alligator lines. Similarly, in the short setup, the entry candle has to be below all three alligator lines. This is to filter some of the false signals caused by noise in the slow markets.

You can learn more about the Alligator uptrend downtrend and Beep Boop Indicator in more detail in their dedicated videos.

However, when I took 100 Trades with the Beep Boop Alligator Trading Strategy, I found out that when the Alligator, and the 200 period moving average, are both in a good trend, you will most likely see a good winning streak, because MACD will identify and give a good entry signal at almost every pullback of the trend. Because of this, in the Trading Rush App, the profit line went in an upward direction. But, Alligator is slow.

You see, the MACD, or in this case, the Beep Boop Indicator does not always give the entry signal after the Alligator shows the same direction. For example, in this uptrend, the Beep Boop or MACD indicator detected the end of the pullback first and gave an entry signal. But the Alligator was slower to react and showed the same trend direction a few candles after the MACD crossover. Since MACD didn’t give a signal when Alligator was indicating the same trend direction, these signals that could have made money were missed but could have taken by both, the Alligator and Beep Boop Indicator when used separately.

So the signals the MACD Alligator Strategy took, were mostly in the middle of a good trend, and near the end of the trend when the Alligator mouth was wide open. Since the market doesn’t stay in the trend forever, many of these trades were lost when the trend started to reverse.

After making a good upward move at the start, the profit line went in the sideways direction for the most part. Even though the Alligator combined with MACD got a 45 percent win rate after 100 trades with a 1.5 to 1 reward risk ratio, the Alligator and Beep Boop separately were way better. Even their and profit graphs went in the upward direction, and not sideways.

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The Alligator with MACD Trading Strategy gets a TR score of 23.5 out of 50, and ranks 26th from the top, above the Stochastic Trading Strategy, and below the Fisher Transform Strategy. For reference, the MACD with the zero line rule ranks first, the Alligator on its own ranks 8th, and the Beep Boop indicator on its own ranks 12th, but the Alligator combined with MACD ranks 26th.

So, as I said in the previous video, the best and proper way to use Alligator with MACD is not on the same timeframe, but MACD on the entry timeframe, and alligator on the higher timeframe.

BEST and Proper Way to use MACD Alligator Trading Strategy

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Tag: MACD alligator

Since the first Alligator Video appeared on the Trading Rush Channel, there has been a lot of requests to combine the Alligator indicator because it performed well, with the MACD Trading Strategy that got the highest win rate. Alligator is a great indicator that will filter range markets, but combining the MACD Trading Strategy with the Alligator is not that straightforward. Before watching this video, it is highly recommended to watch the Alligator and MACD strategy videos on the Trading Rush Channel. Otherwise, some things in this video can go over the head. If we look at this chart, we can see that the entry according to the MACD strategy is right here. In this case, the MACD entry signal made money. But we add the Alligator indicator, the MACD entry signal gets filtered because when MACD gave a long crossover according to the MACD strategy, the Alligator indicator indicated a downtrend. In other words, when we combine Alligator with MACD strategy, the Alligator indicator will filter the good MACD strategy signals.

But there is a better way of using MACD with the Alligator indicator. You see, MACD strategy with its zero line rule, gives entry signals when the pullback is big in a trend. But if the pullback is big, the Alligator Indicator shows an opposite trend. So instead of using alligator and MACD at the same time, you can use the MACD strategy with all its rules that made it a high win rate strategy and use the Alligator indicator on the higher timeframe to filter the range and slow market.

For example, here, if we remove the alligator indicator on the 30 minutes entry timeframe, we can clearly see MACD is giving a long crossover above the 200 EMA. To make sure the price is not in a slow or a range market, we will switch to a higher timeframe like 4h. As we can see, Alligator on the higher timeframe is also indicating a good uptrend with its mouth open. So taking the entry signal on the entry timeframe is a good idea. In the first scenario, the Alligator was filtering MACD signals. But in the second scenario, Alligator was confirming the MACD entry signal.

But if we scroll to the left on the 4h timeframe on the same chart, we can see that when the market was in a range, the mouth of the Alligator was pretty much closed and the Alligator indicator was not indicating any trend. In other words, by using the Alligator indicator on the higher timeframe, you are also avoiding false MACD or other entry signals by filtering the range and slow-moving markets, that some beginner may find difficult to spot just by looking at the entry timeframe. Experience traders can also filter these range markets with the 200 EMA of course. As I said in the MACD video, when the 200 Exponential Moving Average looks flat, don’t take any MACD trades.

Alligator Indicator, on the other hand, makes things easier with its alligator mouth open mouth close analogy. But if you want to see what happens, if we use MACD without its zero line rule to fit with the Alligator indicator on the same timeframe, we will take 100 Trades with it in the next video and also find its win rate.