Having had a look at the Alligator indicator, a quick run through the theory and math behind the Gator oscillator – if you’re familiar with how you can obtain a centered oscillator from such as MACD, it’s pretty much the same deal – except here, with 3 lines to play with, you’ll have 2 histograms, rather than the one.

The Gator Oscillator is a measure of convergence/divergence

The upper histogram = distance between the blue and red lines = between the Alligator’s jaws and teeth
The lower histogram = distance between the red and the green lines = between the Alligator’s teeth and lips.

And again, the histogram bars can be colored red or green:
Red if lower than previous bar
Green if higher than previous bar.

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There’s a set of forex chart patterns which suggest continuation – that is, they are against an established trend, which may resume after their completion.

The flag looks like a rectangle directed against the trend, over a period of 5 to 15 candlesticks. Here’s an example in a bear market

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The main stated purpose of the Alligator indicator is to provide clear signals of a trend – and so reduce the probability of trading in a range-bound market – less effective, less pips, more losses….

The basis of the Alligator, as often, is moving averages. It’s possible to use simple, exponential or smoothed, but the standard recipe is:-

Alligator Jaw line (blue) – 13-period moving average at the mid price (High+Low)/2, offset forwards 8 time units
Alligator Teeth line (red) – 8-period moving average at the mid price (High+Low)/2, offset fowards 5 time units
Alligator Lip line (green) – 5-period moving average at the mid price (High+Low)/2, offset forwards 2 time units.
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The particular divergence of interest to forex traders is when a pair price and its associated indicator(s) start going in opposite directions. Commonly, indicators such as RSI or MACD are the likely candidates.
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The idea that markets move in a cyclic manner is hardly new, and is the basis of several general theories. The Commodity Channel Index (CCI) is an attempt to model these cycles themselves.

As originally formulated, the recommended base parameter is 1/3 of the total cycle length. Therefore if the cycle runs 60 days (a high arriving approximately every 60 days), then a 20-day CCI would be suggested. (But then, I hear you ask, how is the cycle is determined? Which we’ll leave for now, and come back to when time permits…).
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The trailing stop is used in forex to lock in the profits of an already profitable trade.

Let’s take an example, – you’ve bought EUR/USD at 1.3120 and by good analysis (for once), it’s risen 50 pips to 1.3170. You could take your profit here, but all the indicators and the news point to the bull market continuing…

The trailing stop is a stop-loss order at a given percentage below the current market price (in this case – if you were selling on a down trend, the stop would be placed above the present price). The fact that it’s operating on a percentage is the ‘trailing’ part of it – the actual price will vary with the market movement.
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Here’s – what I would think is – an instructive chart where everything does what it’s supposed to for once. Doesn’t matter what the pair is, or indeed what the x- and y-ranges are, except to say they’re standard enough.

We should all be reasonably familiar with the Bollinger Squeeze and Bounce – here’s the Bollinger Walk – (the Bollinger bands are 20-period 2 std deviation – ie. what your software will usually give you by default).

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Don’t confuse RSI with other “relative strength” indices, which you’ll find in discussions of stocks etc. – these refer to relative strength as a comparison between 2 or more different stocks – and so not what we’re doing here in forex…

The RSI plots the magnitude of recent gains versus the magnitude of recent losses – so again, it’s an oscillator, ranging from 0 to 100. It takes a single parameter, the number of time periods used – 14 periods is common, (and was the recommendation of J. Welles Wilder, the popularizer of this indicator – like so many others).
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Twin peaks return… here’s a chart, a real life example.

The price has reached a level of resistance, bounced back off it… and then returned to test the idea one more time for luck… It didn’t work and now there’s a pronounced downtrend forming.

This is the double top, and, as usual, what holds true for the double top will also be so in reverse for the double bottom, which is even less polite.
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Wolfe waves are interesting patterns – that they might be used in forex trading implies something about harmonics and equilibrium in price movement – as if there’s a push and pull effect going on. For example, a drop through a trend may produce an “energy” that propels the price up significantly on the next wave (or the converse) – think about springs, compressed, expanded etc.

Five waves - showing supply and demand (resistance/support) and tending towards an equilibrium price. The bullish formation is shown in the diagram.

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