Alligator tunnel FOREX strategy

Once again we bring you a strategy that combines forex indicator with pattern recognition. This time, we will be looking for pattern that is as simple as it gets. We will use all possible simplification methods to allow us to concentrate solely on the trade itself.

 

 

Forex indicators used in forex strategy

Alligator (56,26,20)

Fractals

Minimal experience with tunnel and trendline drawing.

 

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Forex strategy rules

We switch to the line chart. We will concentrate only on price not candle formation.

We apply indicators in the 15 min chart of any major currency pair.

 

BUY:

 

 

  • Alligator lines confirming uptrend. Lines are clearly separated, untangled and lined from top to bottom: green, red, blue

  • We will draw only upper tunnel trendline (resistance). We do so by finding three highs, each marked by fractal. Each lower than the previous high. What is most important is, that they are perfectly (or almost perfectly) aligned. All three tops can be connected with single line. Example: We used another line to establish maximum deviation that can be accepted, for three tops to be considered aligned.

  • By connecting those three local highs, downwards sloping resistance is created. We enter the trade on resistance breakout, placing stop loss just below the formation low.

  • To establish low of the partial tunnel, we switch to the candle chart for a moment.

  • Take profit: We exit the position in profit once green alligator line crosses red line from above.

 

SELL:

  • Alligator lines confirming downtrend. Lines are clearly separated, untangled and lined from top to bottom: blue, red, green

  • We will draw only bottom tunnel trendline (support). We do so by finding three lows, each marked by fractal. Each higher than the previous low. What is most important is, that they are perfectly (or almost perfectly) aligned. All three bottoms can be connected with single line. We used another line to establish maximum deviation that can be accepted, for three bottoms to be considered aligned.

  • By connecting those three local lows, upwards sloping support is created. We enter the trade on support breakout, placing stop loss just above the formation high.

  • To establish high of the partial tunnel, we switch to the candle chart for a moment.

  • Take profit: We exit the position in profit once green alligator line crosses red line from the bottom.

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ABOUT US

THEFOREXKINGS

“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

—  Marian, Proprietor of TheForexkings.com