Crocodiles are opportunistic predators. They learn the behavior of their prey and lie in wait for long time, and then when the time is right, they snatch their prey with confidence and precision. The crocodile is actually our best role model as traders; their behavior is really the perfect metaphor for how a trader needs to behave. We are without doubt predators, not just trading predators, but as humans we are naturally built and function as hunters. As traders, we must copy the crocodiles’ methods of hunting; we must be disciplined, patient, adaptable and methodical in our approach.
Could you imagine what does it take to hunt a crocodile? It means you have to be twice as smart, fast and ruthless. The trading strategy “Crocodile Hunter” is just about that. If you are an expert trader, you should remember that the strategy used to be very popular in the currency market. That is why it was borrowed for binary options where it became ideal because there is no need to calculate the exact range of the price change. The Alligator Hunter Strategy can be used for any asset, for example the EUR/USD currency pair.
The described trading strategy is a reversal system and works practically on any timeframe and with all assets. It is not recommended to trade on it in the long timeframes because it means that you will deal with very rare signals and waste opportunities hanging on older timeframes.
How to set the parameters for trading
It is easy to guess that at the core of the Crocodile Hunter Strategy is Bill Williams’ advisor called Alligator. The Williams Alligator indicator is a technical analysis tool that uses smoothed moving averages. It uses three moving averages, set at five, eight, and 13 periods. The three moving averages comprise the Jaw, Teeth, and Lips of the Alligator. You do not need to change the default settings for the strategy.
To hunt an Alligator, we need additional tools like RSI for the accuracy of signals. In our system, RSI will represent “hunter”. For our purpose, let us remove the default levels 30 and 70 for RSI, then add 50. The period of the signal line in this case is equal to 14.
We are interested in watching in two lines – blue (jaws) and green (lips) in Alligator. When they cross, it means the reversal of the current trend or the beginning of its correction.
As for RSI, we need to watch the position of the moving average relative to the average level. You can choose any type of the chart as it does not play a role. Most traders like to use Japanese candlesticks.
You can open trading account with the Pocket Option and get access to a wide range of indicators and tools in a standard package. It is recommended to use the MT5 platform or “live chart”.
How to trade with “Crocodile Hunter” strategy
The strategy is easy and fun. It is not complicated but requires attention and understanding. The advantage of the strategy is that it ignores market noise and gives extremely accurate signals. You have to follow current economic and political news because drastic events can in fact cause the strategy fail under condition of unpredictability.
With Crocodile Strategy the CALL option is done after the green line crosses the blue line upwards. The RSI should be above the 50 level.
With Crocodile Strategy the PUT option is done after the green line crosses the blue line downwards. The RSI should be below the 50 level.
The expiry time should not be less than the time of formation of three bars.
Bill Williams’ Alligator indicator provides a useful visual tool for trend recognition and trade entry timing, but it has limited usefulness during choppy and trendless periods. Traders need to confirm buy or sell signals with additional tool or another trend identification indicator. Some traders recommend Alligator Hunter for turbo options. As it was mentioned before, traders should follow the important news because unexpected events cam spoil the course of hunting.
