Traders quite often resort to the Alligator indicator when trading binary options , as it is capable of showing with high accuracy the moment the start of a new trend. However, using this tool separately is quite difficult. The fact is that the Alligator rarely signals directly to open a transaction. But when trading on Pocket Option, the lines of this indicator can be used as support and resistance levels.
The Alligator developer has identified 3 situations that this tool can simulate. The first, or “Alligator's Dream,” is formed at the moment when all three lines are intertwined and positioned horizontally. This situation is typical for a sideways trend (flat). The longer the indicated lines, the stronger the new trend will be.
The second situation, or "Waking the Alligator", is characterized by the fact that the lines unravel. As the distance between them increases, the alligator's mouth is said to be opening on the graph. In which direction the latter moves, the new trend goes.
The third situation, or “Alligator Saturation,” is characterized by a gradual convergence of the lines (traders say that the mouth is closing). This case signals a weakening of the current trend. If such a figure forms on the chart, the deal needs to be closed.
As part of this trading strategy on Pocket Option, it is recommended to open a trade at the moment when the price chart crosses the slow line of the indicator (alligator's jaw). The confirmation signal in this case is the closing of the mouth. That is, the slow indicator line must cross the others.
Trading algorithm in Pocket Option
First you need to install the “Alligator” indicator in the Pocket Option broker terminal.
Then set up the indicator.
After this, you need to wait until the price chart crosses the slow (red) line. The purchase should be made after the Alligator's mouth closes. This happens when the slow line crosses the remaining two. You need to trade in the same direction in which the mouth closes. Let's say if two fast lines are moving down, then you need to open a deal to buy a Put option.
More effective strategy
As previously noted, Poketoption traders often use Alligator lines as support and resistance levels. For example, if the price chart drops to the fast lip line (colored yellow), then you can open a deal to buy a Call option in an uptrend. This signal increases when the second line (jaw line) is not broken.
Trading on Pocket Option using this strategy comes down to the following:
- If the candle closes at or slightly below the lip line, it gives a strong buy signal.
- You can open a trade if a new candle is formed in the same direction in which the lip line is moving.
- A stronger signal to open a trade is considered to be the closing of the specified candle near the lip line.
The best time to buy is considered to be the moment when the candle following the one that broke through the lip line closes in the same direction.
Also, do not forget that you can start trading with additional funds by using promo codes for replenishing your account from the Pocket Option broker, and to improve your performance with this strategy, you can use a promo code to cancel a losing trade for $10 .
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