What is the Alligator?

The Alligator is a combination of Balance Lines using Fractal geometry and nonlinear dynamics.

The blue line that we call the Alligator's jaw is the balance line for whatever time frame is on the chart. The blue balance line is where the market would be if there were no new incoming informations (chaos). The distance between this line and the current price is an indication of how the traders interpret this new incoming information.

The red line represents the Alligator's teeth. It is the balance line for one significant time frame lower. Significant in this case is approximately one-fifth of the time frame on the chart. So, roughly, if the time frame on the current chart is a daily and refers to the blue line, the red line would approximate an hourly chart. Remember that these lines are simulations that were discovered and created by a mainframe computer with a confidence level of more than 99.5 percent. This confidence level means that you may miss not more than 1 out of 200 trades that would be created by a mainframe using nonlinear feedback calculus.

The green line represents the Alligator's lips. It is the balance line for still another significant time frame lower. Again, it would be approximately one-fifth of the time frame of the red line. So if the chart we are examining is a daily, the red line would approximate the hourly chart and the green line would approximate a 5 to 10 minute chart.