Certainly we can and should go over definitions first Eric, although I'm also hoping to see more input with regards to actual trading strategies, like the one brought up by deant. The MACD presents us with a concept (trading the cross-over of two or more MA's) that I'd like to get into later on in the thread once we get everyone "in tune" as I remember Eric putting it.
But in order to make this thread more informative, lets go over two more important functions that MA's are capable of showing us traders about the markets we're trading.
When I first glance at my charts and study my alligator indicator (I use different settings than the original Bill William's settings, which comes with the MT4 platform) I seek to answer my first BIG question: Are we in a trending or ranging market? The alligator provides the answer through its use of three moving averages. If those three MA's are close together and braiding, then we are ranging. Braiding occurs whenever we see the alligator moving sideways and the blue and red MA's criss-cross each other multiple times. If, instead, the MA's are separated and running parallel to each other, then I know we are trending.
So if the market is ranging, then I ignore the alligator all together and revert to my range trading strategy. It has served it's purpose for now, but I know it won't be able to help me any further until we see a trending market again.
If it's trending, meaning the MA's are running parallel to each other, then I ask my next question: What type of trend is this? That question requires more than one answer, all of which the alligator can provide.
1) What is the strength of the trend (strong vs. weak)? The distance between the blue and red MA's as well as other factors I'll get into later help determine this.
2) What TYPE of trend is it (retracement or continuation)? This involves using higher timeframes to see if the current rally you see on the hourly chart, for example, is actually part of a retracement phase of a much bigger downtrend on the 4 hour chart. The answer helps determine crucial decisions such as entry/exit levels and T/P and S/L values.
I feel like that's more than enough information for now to stimulate some discussion. Feel free to continue to post any ideas, questions, or strategies as we go along! Thanks for all the input so far!!!