Awesome Oscillator

Awesome Oscillator. Bill Williams's Awesome Oscillator Technical Indicator (AO) is a period simple moving average, plotted through the bars midpoints (H+L)/2, which is subtracted from the 5-period simple moving average, built .

A bullish setup occurs, when the Awesome Oscillator is above the centerline and two successive red bars form, followed by a green bar. This is a signal to go long.

Awesome Oscillator

Awesome Oscillator. Bill Williams's Awesome Oscillator Technical Indicator (AO) is a period simple moving average, plotted through the bars midpoints (H+L)/2, which is subtracted from the 5-period simple moving average, built .

The Simple Moving Averages that are used are not calculated using closing price but rather each bar's midpoints. AO is generally used to affirm trends or to anticipate possible reversals. Because of its nature as an oscillator , The Awesome Oscillator is designed to have values that fluctuate above and below a Zero Line. The generated values are plotted as a histogram of red and green bars. A bar is green when its value is higher than the previous bar. A red bar indicates that a bar is lower than the previous bar.

When AO's values are above the Zero Line, this indicates that the short term period is trending higher than the long term period. When AO's values are below the Zero Line, the short term period is trending lower than the Longer term period. This information can be used for a variety of signals. This is simply when the AO value crosses above or below the Zero Line. This indicates a change in momentum. When AO crosses above the Zero Line, short term momentum is now rising faster than the long term momentum.

This can present a bullish buying opportunity. When AO crosses below the Zero Line, short term momentum is now falling faster then the long term momentum. This can present a bearish selling opportunity. Twin Peaks is a method which considers the differences between two peaks on the same side of the Zero Line. The second peak is higher than the first peak and followed by a green bar. Also very importantly, the trough between the two peaks, must remain below the Zero Line the entire time.

The second peak is lower than the first peak and followed by a red bar. The bottom between the peaks needs to remain below the centerline as long as the setup holds.

When the two peaks form above the centerline, this provides a trader with the opportunity to go short. The second peak is usually lower than the first one and is followed by a red bar. The bottom between the peaks needs to remain above the centerline as long as the setup holds. This method attempts to identify faster changes in momentum.

It searches for changes in three successive bars, which are all on the same side of the centerline. A bullish setup occurs, when the Awesome Oscillator is above the centerline and two successive red bars form, followed by a green bar.

The second red bar needs to be lower than the first one. A bearish setup occurs, when the Awesome Oscillator is below the centerline and two successive green bars form, followed by a red bar. The second green bar needs to be higher than the first one. Founded in , Binary Tribune aims at providing its readers accurate and actual financial news coverage. Our website is focused on major segments in financial markets — stocks, currencies and commodities, and interactive in-depth explanation of key economic events and indicators.

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Awesome Oscillator This lesson will cover the following Explanation and calculation How to interpret this indicator Trading signals, generated by the indicator.

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