Alligator-Fisher Momentum Burst

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4, D1

Thesis

The strategy assumes that market trends move in 'bursts' rather than linear paths. By using the Alligator to define a latent trend regime and the Fisher Transform to identify normalized momentum cycles, we can enter when the Rate of Change confirms a high-velocity pulse. The edge lies in entering only when structural trend (Alligator) and momentum distribution (Fisher) align with raw speed (ROC), then using an adaptive volatility exit (KAMA) to capture the meat of the move while protecting against the inevitable mean-reversion.

Components

• Bill Williams Alligator (regime) — Identifies periods of trending inertia versus sideways 'sleep' phases to filter out low-probability environments.
• Fisher Transform (EarnForex) (direction) — Provides a Gaussian-normalized view of price cycles to ensure momentum is expanding in the direction of the trend.
• Rate of Change (ROC) (entry) — Acts as the execution trigger by identifying a specific burst of momentum that confirms the trend's resumption.
• MultiKAMA (TyphooN) (exit) — Adjusts the exit threshold based on market efficiency, tightening stops during clean trends and widening them during noise.
• Auto Fibonacci (risk) — Uses market structure (recent highs/lows) to anchor stop losses at historically significant retracement levels.

Known failure conditions

• Alligator lines remain intertwined for >50 bars, indicating a permanent shift to a range-bound regime.
• Fisher Transform oscillates rapidly around zero regardless of ROC direction, indicating signal noise.
• MultiKAMA exit is triggered within 3 bars of entry more than 5 times consecutively (volatility expansion failure).

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