Alligator Flow Strategy

Market: MNQ
Chart: 5-minute
Trading Hours: 7:00 AM to 3:00 PM

Indicators:

  • 9 EMA
  • ATR Bands
  • Williams Alligator (5-minute)
  • Williams Alligator (1-hour)
  • VWAP
  • MACD

Strategy:

Trade MNQ from 7:00 AM to 3:00 PM using the Williams Alligator for entries and exits.

Long Setup

Before Entry

  1. Price must be above VWAP and above the 1-hour Williams Alligator.
    • If price is above VWAP and moving through the 1-hour Williams Alligator, that is also acceptable.
  2. MACD must be rising.
    • Shifting from light red to dark green.

Entry

  1. Enter a long trade when price crosses the Lips (green) or Jaw (blue) line.
    • If price is touching the 2 standard deviation and not above it, don’t take the trade.
  2. Set the stop-loss at 2 ATR.
  3. Place a take-profit order for 1 contract at 2 ATR.
  4. Let the second contract continue with the trend.
  5. When the 2 ATR target is hit, move the stop-loss on the remaining contract to 5 points above the entry price.
  6. Entry at the 9 EMA is also allowed if MACD has switched in favor of a long trade.

Exit

Exit the trade under either of the following conditions:

  1. If the 2 ATR target is hit:
    • Move the stop-loss to 5 points above entry
    • Let the remaining contract run until price crosses the Teeth line (red)
  2. If price crosses back over the Teeth line (red) before the 2 ATR target is hit:
    • Exit both contracts

Short Setup

Before Entry

  1. Price must be below VWAP and below the 1-hour Williams Alligator.
    • If price is below VWAP and moving through the 1-hour Williams Alligator, that is also acceptable.
  2. MACD must be declining.
    • Shifting from light green to dark red.

Entry

  1. Enter a short trade when price crosses the Lips (green) or Jaw (blue) line.
    • If price is touching the 2 standard deviation and not below it, don’t take the trade.
  2. Set the stop-loss at 2 ATR.
  3. Place a take-profit order for 1 contract at 2 ATR.
  4. Let the second contract continue with the trend.
  5. When the 2 ATR target is hit, move the stop-loss on the remaining contract to 5 points above the entry price.
  6. Entry at the 9 EMA is also allowed if MACD has switched in favor of a short trade.

Exit

Exit the trade under either of the following conditions:

  1. If the 2 ATR target is hit:
    • Move the stop-loss to 5 points below entry
    • Let the remaining contract run until price crosses the Teeth line (red)
  2. If price crosses back over the Teeth line (red) before the 2 ATR target is hit:
    • Exit both contracts

Rules / Notes

  • Do not trade on FOMC days
  • Avoid trading before:
    • CPI
    • PPI
    • Powell speeches
  • CPI and PPI days could be tested further to determine whether they are tradable
  • Because this strategy is being backtested, you must wait for the bar to close before confirming entries or exit

Size Level

MNQ

2 contracts – $4,000 to $8,000 (2,000 to 4,000 points)

4 contracts – $8,000 to $12,000 (4,000 to 6,000 points)

6 contracts – $12,000 to $16,000 (6,000 to 8,000 points)

8 contracts – $16,000 to $20,000 (8,000 to 10,000 points)

10 contracts – $20,000 to $24,000 (10,000 to 12,000 points)

12 contracts – $24,000 to $28,000 (12,000 to 14,000 points)

14 contracts – $28,000 to $32,000 (14,000 to 16,000 points)

16 contracts – $32,000 to $36,000 (16,000 to 18,000 points)

18 contracts – $36,000 to $40,000 (18,000 to 20,000 points)

NQ

2 contracts – $40,000 to $80,000 (20,000 to 40,000 points)

4 contracts – $80,000 to $120,000 (40,000 to 60,000 points)

6 contracts – $120,000 to $160,000 (60,000 to 80,000 points)

8 contracts – $160,000 to $200,000 (80,000 to 100,000 points)

10 contracts – $200,000 to $240,000 (100,000 to 120,000 points)

12 contracts – $240,000 to $280,000 (120,000 to 140,000 points)

14 contracts – $280,000 to $320,000 (140,000 to 160,000 points)

16 contracts – $320,000 to $360,000 (160,000 to 180,000 points)

18 contracts – $360,000 to $400,000 (180,000 to 200,000 points)