The alligator indicator is composed of three lines, which are actually slightly modified moving average lines. The moving averages are smoothed, but they are also displaced, meaning they are shifted several bars into the future to produce better results. Those three lines are called the jaws, teeth, and lips of the alligator. The three lines are then used to determine whether the traders should be focusing on a trend trading strategy, a range-bound strategy, or a breakout strategy. When setting up the indicator the lips are set to 5 and displaced by 3, the teeth are set to 8 and displaced by 5, and the jaws are set to 13 and displaced by 8.