Awesome Oscillator – AO

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    WikiAdmin
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    Technical Indicator Awesome Oscillator (AO) is a 34-period simple moving average constructed on the average points of bars (H + L) / 2, which is subtracted from a 5-period simple moving average constructed at the central points of bars H + L) / 2. He accurately tells us what is happening at the current time with the driving force of the market.

    Signals for purchase in Awesome Oscillator

    Saucer

    This is the only buy signal that occurs when the histogram is above the zero line. It is necessary to remember the following:

    the “Saucer” signal is formed when the histogram changes direction from the descending to the ascending one. The second column is lower than the first and it is painted red. The third column is higher than the second and it is green.

    Remember that when using the “Saucer” buy signal, all Awesome Oscillator columns should be above the zero line.

    Zero-line intersection

    A buy signal is generated when the histogram changes from negative to positive values. Wherein:

    Wherein:

    To generate this signal, only two columns are needed

    the first column must be below the zero line, the second column must cross the zero line (the transition from negative to positive)

    It is impossible to simultaneously have a signal to buy and sell.

    Two peaks

    This is the only buy signal that can be generated when the histogram values ??are below the zero line.

    Here it is necessary to remember the following:

    the signal is generated when you have a downwardly directed peak (the lowest low) that is below the zero line followed by another downwardly directed peak that is higher (a negative number smaller in absolute value, so it is closer to the zero line) than the previous peak looking down;

    The histogram must be below the zero line between the two peaks. If the histogram crosses the zero line between the peaks, the buy signal does not work. However, a signal is generated for the purchase of the “Zero Line Crossing”;

    each new peak of the histogram should be higher (a smaller negative number that is closer to the zero line) than the previous peak;

    if an additional higher peak (which is closer to the zero line) is formed and the histogram does not cross the zero line, an additional signal for purchase is formed.

    Signals for sale in Awesome Oscillator

    The signals for the sale of the Awesome Oscillator are identical to the signals for the purchase. The “Saucer” signal is turned upside down, and is below zero. “The intersection of the zero line” goes in descending order – the first column is above zero, the second column is lower. A “two peaks” above the zero line and also upside down.

    Awesome Oscillator

     

    Calculation for Awesome Oscillator

    Histogram Awesome Oscillator is a 34-period simple moving average, constructed from the central values ??of the bars (H + L) / 2, subtracted from the 5-period simple moving average at the central points (H + L) / 2.

    MEDIAN PRICE = (HIGH + LOW) / 2

    AO = SMA (MEDIAN PRICE, 5) -SMA (MEDIAN PRICE, 34)

    Where:

    MEDIAN PRICE – the median price;
    HIGH – the maximum price of a bar;
    LOW – the minimum price of a bar;
    SMA is a simple moving average.

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