Awesome oscillator (AO)

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Trading with the awesome oscillator

The awesome vibrator is an industrial indicator that is used in economic markets to prove or disprove trends in price charts. In these charts, current information is equated together with significant information to predict the momentum in the bazaars. This can also help to determine whether the current direction is considered to be bullish or bearish and what is the possibility of its continuation or reversal.

The pointer is considered a significant technological pointer for short-term trading strategies, such as day trading and scalping. The awesome vibrator is considered a significant component of technological consideration, in which reading the price impact in trader’s charts, more generally candlestick charts, can help to establish signals in the purchase and also possible reversal points up to the point where the trader opens the deal.

What is the awesome oscillator?

The awesome oscillator is a type of technological indicator that was invented by Bill Williams as a way to trade promotions, forex, and commodities. Someone also created an oscillator-accelerator that functions similarly to the awesome oscillator. In today’s period, this pointer can be used for absolutely all economic bazaars, including these, which were described more. For the awesome oscillator option, it is possible to use a large number of timeframes, be it minutes (extremely short-term), time (short-term), time (medium-term), or months (long-term).

Awesome oscillator calculation

Our trading platform automatically calculates the awesome oscillator formula when it is applied to a price chart, but it is still useful to know its original formula. The awesome oscillator looks at the last five bars on the candlestick chart compared to the previous 34. The value is then calculated by the difference of the simple moving average (SMA) on these two timeframes. The awesome oscillator formula is as follows:

Median price = (high session price + low session price) ÷ 2

Awesome oscillator = 5-period simple moving average (median price) – 34-period simple moving average (median price)

How to read the awesome oscillator?

In many trading platforms, the awesome oscillator consists of greenish as well as scarlet bars or directions. Greenish bars imply “rises” if the role of the awesome oscillator is more than the last bar, and scarlet – “fall” if the role is further than the last bar. In the middle, there is no direction, and the bars are erected based on the payback of 2 moving mediocre. Below is a picture from our Next Generation trading platform, where greenish and scarlet directions are outlined to reflect growths and regressions in the price chart.

Traders have a chance to use reference directions to interpret whether the stock market is moving in one direction or another. If the awesome vibrator crosses any line, this indicates a bullish impulse, if someone crosses any line further, this indicates a bearish impulse. The situation can simply change, for this reason, the awesome vibrator is called to establish whether the unit is uninterrupted direction or takes to open. The chart below shows how greenish directions indicate a bullish impulse and scarlet directions indicate a bearish impulse in the price chart.

Awesome oscillator as a divergence indicator

The pointer can be used to measure convergence as well as divergence of the asset value. For this reason, if the value reaches the latest maximum or the latest minimum amount, it is necessary to check whether the pointer unit displays this procedure. If the pointer does not hold the pricing process, in this case, this can talk about the reversal of rate changes.

Do not forget that industrial pointers have the chance to only predict the direction and power of the trade and also have no chance to ensure that the cost will move in a particular direction. This can be only a fleeting discrepancy, after which the cost again moves in agreement with the initial trend. In case you all without exception noticed divergence in your own trader’s chart, in this case, you can wait until the tone of the oscillator directions will not change in any way.

Accelerator oscillator vs. awesome oscillator

The Accelerator Oscillator is the only Bill Williams industrial indicator that is calculated as a difference between the awesome oscillator and the 5-period moving typical oscillator. This indicator was invented as well as an overtaking indicator with the purpose of premature detection of momentum changes. To put it more precisely, its task is to give a forecast of value changes by measuring the forcing or restraint of the current bazaar impulse. According to the external type, the forcing vibrator is similar to the amazement vibrator: greenish tone means “growth”, and scarlet tone means “fall”, but there are some significant differences between them.

For example, if the vibrator crosses the line more or further than the zero mark, this is not considered a commercial warning but simply indicates the presence of a bullish or bearish position. Oscillator-accelerator can help traders to set positive and negative values, in order not to enter into operations that do not look promising. Traders are often advised not to buy if the final cocktail bar in the current chart is scarlet, and also not to realize if the final cocktail bar is greenish. This can help traders make the weightiest decisions on entry and exit from volatile bazaars.

Vibrator Collider is available together with the awesome oscillator in our MetaTrader 4 software.

How to use the awesome oscillator?

In economic markets, the awesome vibrator can be used to generate different trading signals, for example, buy or sell signals. This is especially useful for short-term trading strategies if traders try to enter and exit positions as soon as possible.

A popular trading strategy with the use of the awesome oscillator is the use of zero-direction crossing to interpret signals. As previously described, a “bullish” intersection is made if the vibrator crosses the line more, and “bearish” – if the vibrator crosses the line further. Both of these indicators indicate a probable reversal despite the past price change of the rate. If the value of the asset decreases beyond the zero direction, traders have all the chances along with a huge opportunity to open a short transaction, and not a long one, which can be most suitable if the value increases and also rises above the zero direction. Another well-known trader’s policy together with the use of oscillators – is the selection of “bullish” and “bearish” “saucers” in the price charts. They demonstrate rapid changes of impulse instantly in 3 or more pure platters, which stay either farther or further than the zero direction. A bullish “saucer” appears if the awesome vibrator stays more than the zero direction and also in the mute 2 scarlet bars appear, the 2nd being less than the 1st, because of which a greenish cocktail bar is needed. The bear saucer functions opposite 2 herbal bars further zero direction, the 2nd is less than the 1st, because of which a scarlet cocktail bar is needed.

The “saucer” policy can be applied to establish entry points and exit points from the view, as the trader will try to acquire assets until then, as well as the value increases. However, these signals in the acquisition as well as realization do not ensure the extraction of income and must be used in combination with other industrial strategies to model the power and trend of bazaar rate changes. For this reason, it is always rational to use such risk management devices, as well as stop-loss orders, to close the transaction in the presence of gaining the largest amount of loss of funds.

Awesome oscillator scalping strategy

Scalping is a policy, the presence of which traders use small as well as infrequent value movements in volatile markets to extract income. Their views, as well as the principle, last for several seconds or minutes. In the presence of placing the awesome oscillator in your own trader’s chart, it is possible to adjust the timeframe to a much smaller interval to display this scalping strategy. This makes the awesome vibrator an effective indicator for scalping, especially in combination with other indicators such as Bollinger Bands. The vibrator can provide fast and clear trading signals, allowing the scalper to enter as well as exit the operation in the downloaded moments, which gives him a chance to profit from a bullish or bearish trade. This is particularly useful in Forex trading the presence of cash trading in pairs.

MACD and awesome oscillator strategy

The Moving Average Convergence and Divergence (MACD) pointer is similar to with awesome oscillator in that both of them reflect the commercial push of the present time in comparison with the previous stages, as well as both of them, are used to extract signals about the direction of rate changes. The MACD and awesome oscillator policy implies the application of the MACD pointer to establish entry and exit signals as well as to prove these signals together with the support of AO, applying the “paired peaks” strategy. Learn more about MACD in trading.

Trade with the awesome oscillator on our platform

The awesome oscillator is available for use in our rewarded Next Generation Trading Desk. I recommend a wide range of tradable assets to practice strategies with awesome oscillators and other momentum and rate indicators. Our value projection and drawing devices allow you to set up charts in such a way that the information is displayed and the price process is easier to read and interpret. Learn more about the graphing capabilities of Next Generation from our training guides on the platform.

Awesome oscillator for MT4

It is possible to trade with the support of the delightful oscillator in the MetaTrader 4 international trading platform. This software is simply publicly available for those who have previously symbolized together with the platform, and MT4 provides several other trader pointers as well as add-ons that can be utilized on your device. Uncover the result in MT4 directly nowadays to start working.

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