GATOR (Gator Oscillator)

The name Gator is a metaphor used by the author because he saw a lot of similarity in the oscillator's behavior on the chart and a gator (alligator) in the wilds. To Bill Williams, the shapes of the oscillator's graphical presentations resemble the creature's big mouth with jaws, teeth, and lips, and how it sleeps, wakes up, opens the mouth, eats, closes the mouth, and falls asleep again. In the article, we will keep the author's metaphoric terminology.

In his book, Bill Williams states: "Most of the time, the market goes nowhere. Only 15 to 30 percent of the time does the market trend, and traders who are not on the floor make nearly all of their profits in a trending market." GATOR is intended to help detecting the market price trend's presence or absence, and, if the trend is present, its beginning and ending.

For these purposes, first, the ALLIGATOR indicator's values of the Jaw, Teeth, and Lip lines are calculated, then, the values are used to draw the GATOR oscillator. The Teeth line forms the centerline of the oscillator. The values above the centerline are calculated as the difference between the values of the Jaw and Teeth lines, and the values below the centerline are calculated as the negative difference between the absolute values of the Lip and Teeth lines. A trader can choose to present the GATOR values above and below the centerline as bars or lines. Their colors can also be specified, but the default colors are green and red. When a bar or line value is greater than the previous one, it is green. Conversely, when a bar or line value is less than the previous one, it is red. The bars or lines diverge from or converge towards the centerline, thus, indicating different states of the market. When the oscillator's lines or bars stay close to the centerline changing their colors between red and green, the market is assumed to be moving sideways (or, using Bill Williams' metaphor, the gator sleeps). When the lines or bars start to spread and diverge from the centerline, a market price trend begins (the gator opens the mouth and starts eating). When the lines or bars turn all green, the trend is formed, (the gator eats). The father the lines or bars diverge from the centerline, the stronger the trend is. When the lines or bars turn all red, the trend ends (the gator is sated and falls asleep waiting for the next market price trend to emerge).

Note that the oscillator is always drawn in an additional area below the market price chart.

On the following picture, you can see examples of the GATOR oscillator drawn with the help of lines and bars.

GATOR determines a market price trend's presence without indicating its direction up or down (uptrend or downtrend), thus, it is recommended using the oscillator in conjunction with other indicators, such as trend ones.

Please remember that as its Data Source the oscillator uses the data of another indicator that, in its turn, uses the historical data and reveals the trends that belong to the past. A trader can only suppose that the market will continue to develop in the same way for some time in the future and try to use the supposition appropriately.

To apply a GATOR oscillator to a chart, a trader needs to follow the procedure common to all Marketscope indicators. For more information, see the Add Indicator article.

During the procedure, a trader can customize the oscillator by specifying its parameters in the Properties dialog box. For more information, see the Change Indicator Properties article.

The parameters fall into two groups:

Calculation - the parameters needed to calculate an oscillator's prices.

Style and Appearance - the parameters needed to specify the way an oscillator appears on a chart.

Alligator Jaw smoothing periods - the parameter allows specifying the number of periods, over which the longer-period moving average indicator is to be calculated. The possible parameter's values are from 1 through 300. The default value is 13. The smaller the number is, the more sensitive to the market changes the GATOR oscillator is, and vice versa. The most popular value is the default one - 13.

Alligator Jaw shifting periods - the parameter allows specifying the number of periods, over which the longer-period moving average indicator is to be shifted into the future. The possible parameter's values are from 0 through 300. The default value is 8. The smaller the number is, the more sensitive to the market changes the GATOR oscillator is and vice versa. The most popular value is the default one - 8.

Alligator Teeth smoothing periods - the parameter allows specifying the number of periods, over which the medium-period moving average indicator is to be calculated. The possible parameter's values are from 1 through 300. The default value is 8. The smaller the number is, the more sensitive to the market changes the GATOR oscillator is and vice versa. The most popular value is the default one - 8.

Alligator Teeth shifting periods - the parameter allows specifying the number of periods, over which the medium-period moving average indicator is to be shifted into the future. The possible parameter's values are from 0 through 300. The default value is 5. The smaller the number is, the more sensitive to the market changes the GATOR oscillator is and vice versa. The most popular value is the default one - 5.

Alligator Lips smoothing periods - the parameter allows specifying the number of periods, over which the shorter-period moving average indicator is to be calculated. The possible parameter's values are from 1 through 300. The default value is 5. The smaller the number is, the more sensitive to the market changes the GATOR oscillator is and vice versa. The most popular value is the default one - 5.

Alligator Lips shifting periods - the parameter allows specifying the number of periods, over which the shorter-period moving average indicator is to be shifted into the future. The possible parameter's values are from 0 through 300. The default value is 3. The smaller the number is, the more sensitive to the market changes the GATOR oscillator is and vice versa. The most popular value is the default one - 3.

Smoothing method - the parameter allows specifying the smoothing technique to be applied during the calculation of the GATOR values. The possible parameter's values are MVA, EMA, LWMA, SMMA, Vidya (1995), Vidya (1992), and WMA. The default value is SMMA. Traders choose the smoothing technique in accordance with their needs and preferences. The most popular value is the default one - SMMA.

The parameters are available on the Parameters tab of the GATOR Properties dialog box under the Calculation heading.
GATOR has the following Style parameters:

Display mode - the parameter allows to specify the way the oscillator is to be drawn on the chart: either as a histogram or as a line. The possible values are Histogram and Line. The default value is Histogram.

Growing bar and up line color - the parameter allows to specify the color of the histogram's bar or line, the value of which is greater than the value of the immediately preceding one. By default, the color is green.

Up line width - the parameter is similar to the Line width parameter of all the other standard indicators of Marketscope.

Up line style - the parameter is similar to the Line style parameter of all the other standard indicators of Marketscope.

Falling bar and down line color - the parameter allows to specify the color of the histogram's bar or line, the value of which is smaller than the value of the immediately preceding one. By default, the color is red.

Down line width - the parameter is similar to the Line width parameter of all the other standard indicators of Marketscope.

Down line style - the parameter is similar to the Line style parameter of all the other standard indicators of Marketscope.

The parameters are available on the Parameters tab of the GATOR Properties dialog box under the Style heading.

When a GATOR oscillator is drawn on a chart, a trader can analyze its information and try to interpret it correctly.

GATOR does not produce direct trading signals, but, as it detects a market price trend's presence or absence, the oscillator can be used as an auxiliary technical analysis tool confirming or denying trading signals of other indicators.

The GATOR oscillator's values are calculated automatically using the following formulas:

where:
Upper Gator - is the GATOR value of the line or bar above the centerline.
Lower Gator - is the GATOR value of the line or bar below the centerline.
Jaw - is the longer-period ALLIGATOR value.
Teeth - is the medium-period ALLIGATOR value.
Lips - is the shorter-period ALLIGATOR value.