Definition

The Gator Oscillator (GO) is a tool that gives you insights into market trends by focusing on the relationships between three Simple Moving Averages (SMMAs): Jaws, Teeth, and Lips. It shows this relationship through two histograms. The positive histogram represents the absolute difference between the Jaws and Teeth SMMAs, while the negative histogram reflects the absolute difference between the Teeth and Lips SMMAs, multiplied by -1.

Suggested Trading Use

When the bars on the histograms turn green, this indicates that the moving averages are moving apart from each other, suggesting that the trend is gaining strength. This could be a good time to enter a trade that aligns with the direction of the trend.

Red bars on the histograms mean the moving averages are coming closer together, indicating the trend may be losing steam. During these periods, you might consider tightening stop losses or preparing to exit a trade.

If the histograms are compressing towards each other, this usually indicates a consolidating market, making it a less ideal time to enter new trades based on trend-following strategies.

The Gator Oscillator provides a way to gauge the strength of the market's trend, helping you align your trades accordingly.