Gator Oscillator

Larry Williams

Bill Williams developed the Gator Oscillator; the indicator utilizes a histogram format to indicate the convergence and divergence of three Smoothed Moving Averages (SMMAs) to generate trade signals. The indicator is most useful in markets that display strong directional price action. It is designed to capture emerging trends and also indicate to traders when the trend is nearing completion.


Median Price = (High + Low)/2

  • Jaw, (blue line), is a 13 period SMMA shifted 8 periods into the future. It is the slowest indicator.
  • Teeth, (red line), is an 8 period SMMA shifted 5 periods into the future.
  • Lips, (green line), is a 5 period SMMA shifted 3 periods into the future. It is the fastest indicator. 

Top bars of histogram (Above zero) = Absolute value (Jaw – Teeth)
Bottom bars of histogram (Below zero) = - {Absolute value of (Teeth – Lips)}

N.B. By default green is used for rising bars and red for falling bars (as compared to the previous bar).

Trading using the Gator Oscillator

To trade using the Gator oscillator we first need to examine the various states of the Gator:

  • Gator Awakens: when after sleeping one of the indicator bars is red and the other one is green (either above or below zero) 
  • Gator Eats: when both bars (above and below zero) are green 
  • Gator Sated: when after eating one of the bars (above or below zero) turns red 
  • Gator Sleeps: when both bars (above and below zero) are red

The Gator is interpreted on the basis that each phase of a trend has a life cycle of its own indicated by the awakening, eating, stopping, and sleeping of the Gator. During the formation stage of a trend one of the upper or lower bars will turn green (gator awakening). As the trend accelerates an increasing number of double green bars above and below zero will be observed (gator eating). As the trend nears exhaustion running out of momentum one of the previously green bars will turn red (gator sated). When both bars are red, the trend has ended and a new trend cycle is awaited (gator sleeping). 

To trade the indicator traders would typically look to initiate a position during the awakening phase, holding it through the eating phase as the trend accelerates then look to liquidate/take profit on the position when the gator is sated as the trend nears completion. As the gator oscillator is a moving average based system, traders need to mindful of the limitations of moving averages when using the indicator (i.e. signal lag).