Awesome oscillator

Awesome oscillator (AO) – it is also awesome Bill Williams oscillator. AO works on any timeframes and on any trading pairs

AO calculates the difference between 34 period and 5 period simple moving averages. The simple moving averages used are not calculated using the closing price, but the midpoints of each bar are used. AO is usually used to confirm a trend or to predict possible reversals.

Awesome Oscillator is designed to have values   that fluctuate above and below the zero line. The generated values   are displayed as a histogram of red and green bars. The bar is green when its value is higher than the previous bar. A red bar indicates that the bar is lower than the previous one. When AO values   exceed the zero line, this indicates that the short-term period tends to exceed the long-term period. When AO values   are below the zero line, the short-term period tends to be lower than the period. This information can be used for various signals.

Awesome Oscillator Signals

– Zero cross.

When an AO crosses the zero line, the short-term momentum is now growing faster than the long-term momentum. This can provide bullish buying opportunities. When AO crosses below the zero line, the short-term impulse now drops faster than the long-term impulse. This could be a bearish selling opportunity.

– Twin Peaks is a method that takes into account the differences between two peaks on one side of the zero line.

This signal is generated when we observe a peak pointing down, below the zero level of AO, followed by a second peak, also directed down, but having a peak that is higher than the peak of the previous peak. “Two peaks” down is a buy signal. The histogram between the two peaks should remain below the zero mark. If there is an intersection of the zero level in the interval between two peaks, the signal is canceled. The signal bar of the histogram should be green.

Two peaks located above the zero level of AO, directed upward, the value of which decreases – a signal to sell. The AO signal column must be red. The presence of a zero level intersection between peaks also cancels the signal.

– Bull Saucer

For the formation of this signal, the AO histogram must be above the zero level. A saucer needs at least three columns to form. The 1st and 2nd columns are red and lower (the value of the 2nd column is less than the value of the 1st), the 3rd column is green and increases (its value is greater than the value of the 2nd column). The price bar at which you found the 3rd column of the saucer is a signal. After closing it, place a pending order at a price slightly higher than the maximum of the signal bar, stop loss can be set at the level of the local minimum or minimum of the signal bar.

– Bear saucer

Overall, the Awesome Oscillator can be a pretty valuable tool. AO (impulse) can be used in some cases to generate signals, but, like any indicator, it should be used with caution.

The awesome oscillator provides quality information and can be a valuable technical analysis tool for many analysts and traders.