Gator Oscillator: the Alligator gaps drawn as histograms

What it measures

The Gator plots the absolute distance between the Alligator jaw and teeth above the zero line, and the distance between the teeth and lips below it.

It exists because the important part of the Alligator is the spacing, and spacing is much easier to read as a bar height than as a gap between three overlapping lines.

It measures nothing new. It is a presentation of the Alligator that removes the need to judge distances by eye.

How it is calculated

These are the steps Basis performs, verified against the published definition.

1. 1

   Take the absolute difference between the jaw and the teeth and plot it upward.

2. 2

   Take the absolute difference between the teeth and the lips and plot it downward.

3. 3

   Colour each bar according to whether it grew or shrank compared with the previous bar.

How to read it

• Both histograms shrinking is the sleeping phase — no trend, and the indicator is telling you to wait.
• One growing while the other shrinks is the awakening, the transition worth watching.
• Both growing is the eating phase, a trend with room in it.
• Both shrinking after both grew is the sated phase, which is where trends end.
• The four phases are a cycle, and knowing which one you are in decides what kind of tool to reach for next. Sleeping favours range tactics, awakening favours breakout entries, eating favours trailing a position, and sated favours taking it off. The oscillator will not tell you direction in any of them.
• It shares the Alligator displacement, so the histograms next to the current bar were computed from data several bars old and a backtest must read the displaced value that was actually available at the time.

Where it misleads

Related indicators