The MT5 platform indicator has standard settings and requires no modifications when connected to the chart. Modifying the indicator involves adding two functions:
- Marking the area when the indicator lines are in the correct sequence (green line above or below red and blue lines, and red above or below blue). This creates a confirmed cross marked by the closing price to avoid false signals during the Alligator lines' entanglement periods.
- Drawing horizontal rays from market structure break levels when the trend theory's postulate is violated.
These functions complement each other, serving as filters for trading signals. Two conditions must be met to identify an entry point: a marked Alligator lines cross and a horizontal line at the market structure break level. On the price chart, the Alligator lines cross and market structure break may occur in different sequences. Having precisely two marked trading signals initiates the search for entry points according to the "Trading Chaos" strategy.
The prevailing trend is on a higher timeframe. For example, if the Alligator lines on the daily period are upward, and there's a marked cross of Alligator lines on the left of the chart with a horizontal line at the top of the descending market structure, contrary signals on lower timeframes, indicating a bearish direction, have less significance. They suggest a possible correction in the directional bullish trend of the daily range.
The indicator is part of the "Trading Chaos" strategy software suite and is recommended for use with the following software products:
- Trading Chaos Expert
- Trading Chaos Chart
- Modified Awesome Oscillator
- Spread and Swap monitor
- Auto Format