Gator Oscillator is a technical indicator developed and designed by Larry Williams. The indicator utilizes a histogram format to indicate the convergence and divergence of three Smoothed Moving Averages (SMMAs) to generate trade signals. Gator Oscillator is widely used in markets that display strong directional price action. Its purpose is to capture emerging trends and to give signals to traders when the trend is nearing completion.
The Gator oscillator uses the same working principle as the Alligator indicator. They even have the same settings. The difference between them appears is the way the various gator actions are being displayed.
There are three types of bars in this indicator: green, red and mixed. The green bar indicates that its value is greater than the previous one; the red indicates the opposite.
- The gator awakes – if the gator has been sleeping and we see that the bar are both green and red, then the gator is waking up.
- The gator eats – the bars are solid green.
- The gator is fed – after solid green bars, we see mixed bars.
- The gator is sleeping – the bars are solid red.
When we see that the gator is eating, this means that the trend is strong, but we cannot determine the direction by the oscillator itself. So, experts recommend traders to use this momentum indicator in combination with multiple different indicators to confirm the direction.