This will probably be the simplest way to make Awesome Oscillator alerts. However, this strategy is far from fool-proof and should be used in conjunction with other technical indicators and fundamental analysis. The Multi Trend Oscillator is a tool that combines the ratings of several indicators to facilitate the search for profitable trades. I was inspired by the excellent indicator “Technical Ratings” from Team TradingView to create an alternative with a technically new approach. Therefore, it is not a modified copy of the original, but newly conceived and… This indicator is based on Bill Williams` recommendations from his book “New Trading Dimensions”.

This indicates various degrees of momentum strength; However, the real shift in sentiment happens once the AO histogram crosses above the zero line which is why this is our entry signal. The Bill Williams Awesome Oscillator strategy is a momentum strategy that takes advantage of the most immediate trend. This strategy is similar to our Breakout Triangle Strategy.

This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. A bullish saucer is identified when the AO is above the zero line and three histograms go in order as one red bar, a second red bar lower than the first, and a green bar immediately after. This formation resembles a small saucer-shaped dip in the overall histogram. This strategy attempts to identify market reversals by examining the difference between two peaks on the same side of the zero line. The general market momentum as indicated by the AO is represented by the color of each histogram bar.

There are several different strategies you can use with the AO to confirm or disprove potential market trends. Used this way, the indicator Nord FX Broker Review is a powerful tool to help you determine when to go long or short. The bar chart is to be below the nought line between the two pikes.

How the Awesome Oscillator is different from MACD

Both divergence can be invalidated if a curve on our awesomeoscillator go over the green horizontal line. In most of the graphs, momentum is classified and indicated in respect of the color of the bars. Saucers can be either bullish or bearish, depending on their position with respect to the zero-line. In both cases, at least three columns of the histogram are needed to form the Saucer. It is recommended to place a pending buy stop order above the high of the candle that corresponds to the signal column in the histogram. Can change the Growing Bar’s color and thickness as well as the indicator’s visual type .

At my leisure, I love attending live music, traveling, and partying with friends. Most forex traders are trend traders and follow the trend using… Pivot points are an excellent leading indicator in technical analysis. We also have an indication of higher low or lower highs on the indicator which we have when looking at trending price action. Any and all information discussed is for educational and informational purposes only and should not be considered tax, legal or investment advice. A referral to a stock or commodity is not an indication to buy or sell that stock or commodity.

What is the Awesome Oscillator: Definition, Use, and Strategies

Your results may differ materially from those expressed or utilized by Warrior Trading due to a number of factors. We do not track the typical results of our past DIY Financial Advisor: A Simple Solution to Build Your Wealth or current customers. As a provider of educational courses, we do not have access to the personal trading accounts or brokerage statements of our customers.

Can also toggle the visibility of a price line showing the current value of the Awesome Oscillator. Twin Peaks is a method which considers the differences between two peaks on the same side of the Zero Line. We will do our best to help every trader find a strategy that works for them… Now the Awesome oscillator Twin Peaks pattern has completed. But, we still don’t have confirmation that the buyers have taken the lead, which brings us to the next step of the Bill Williams Awesome oscillator strategy. Now, let’s move forward to the most important part of this article, the trading rules of the Bill Williams Awesome oscillator strategy.

They are similar in that the histogram shows the difference between a fast moving average and a slow moving average. Once we see a green bar rise above the previous red histogram bar, we go long. The green bar indicates a return of momentum or an ending of a pullback. What we can do is add simple price patterns (covered in my free Price Pattern E-Book) to the signals given by the oscillator. The histogram will either be located above the zero line for short term bullish trend and below the zero line for a bearish outlook.

Swing ZZ Zigzag Indicator

In short, if you see the price of a security going up and making new higher highs, but the AO is making new lower highs, you have a divergence. This isn’t necessarily the Awesome Oscillator’s fault, as low float securities move erratically over short periods. In fact, most indicators have a hard time with 4xCube Forex Broker Overview small-cap investments, but this makes it near impossible to use the Awesome Oscillator in crypto markets without pairing it with more reliable tools. There are also ‘hidden’ divergences that can result in both bullish and bearish markets. However, they are rarer and require a more trained eye to spot.

Traders might open a short position during the third bar or after the fourth forms, provided it is also red. This indicator uses a zero line in the centre, either side of which price movements are plotted according to a comparison of two different moving averages. However, the Awesome Oscillator is still one of the most widely used and vetted technical analysis tools available today. While there are bound to be traders who swear against it, with how diverse its range of functions is, it’s safe to say the trading world as a whole would be far worse off without it. A divergence occurs when the Awesome Oscillator reports momentum that doesn’t conform with recent price action and can often indicate a reversal or corrective move soon.

• For example, a hidden bullish divergence occurs when the price makes a higher low, but the indicator’s low continues falling.
• He was also responsible for developing the Bill Williams Alligator, the Market Facilitation Index, the Fractals indicator, and the Gator Oscillator.
• A buy signal will be more qualified when the oscillator shows oversold situations.
• Because it plots the variation between a slow-moving and a fast-moving average, the indicator prints both positive and negative values.
• Virtually all charting platforms should have the AO as a technical indicator you can use.

Awesome oscillator is a convenient tool for defining market trends – it can be used by both beginners and seasoned traders. Thanks to its comprehensive visuals and customization, AO can be applied to any timeframe, but proves to be particularly useful for short- and mid-term trading. Another way to use Awesome Oscillator in your trading strategy is to spot divergences.

The name “Awesome” may have had you thinking it did something really special when you add it to a trading strategy. You can test the trade signals of this indicator by creating an Expert Advisor in MQL5 Wizard. Keep in mind, that all Awesome Oscillator columns should be over the zero line for the saucer signal to be used.

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The histogram between the formed peaks must be completely above zero. If the histogram crosses the zero level in the interval, the “Two Peaks” sell signal becomes invalid. The Awesome Oscillator also allows you to spot divergences. If, for example, the price makes new highs, and the AO does not show new highs, this is a bearish divergence, the price may go down. Accordingly, a bullish divergence occurs when the price keeps falling, and the oscillator shows an increase, in which case a trend change to an uptrend is expected. During strong trending markets, the Awesome Oscillator will keep you riding the trend while other momentum indicators will stop you out on a minor pullback or retracement.

Because it plots the variation between a slow-moving and a fast-moving average, the indicator prints both positive and negative values. A positive reading means that the fast-moving average (5-period) is more than the slow-moving average (34-period). Also, a negative reading indicates that the slow-moving average is more than the fast-moving average. When a bullish saucer is identified, traders might enter a buy position during the third bar or during the fourth bar provided it is also green. Occur when there are two peaks in momentum below the zero line, that is the second being closer to the zero line than the first.

If an additional higher pike is formed and the bar chart has not crossed the zero line, an additional signal to buy will be generated. If an additional higher pike is formed and the bar chart has not crossed the nought line, an additional signal to buy will be generated. Keep in mind, that all Awesome Oscillator columns should be over the nought line for the saucer signal to be used. The AO uses the middle of the high/low of the candlestick or bar chart. Virtually all charting platforms should have the AO as a technical indicator you can use. But like any technical indicator, the Awesome Oscillator, when understood, could add something to your present strategy to increase your edge.

What I have done is used the AO as a momentum trend tool and common price patterns, pullbacks and breakouts, as a means to trade the chart. The Awesome Oscillator is another technical indicator designed to measure market momentum on any time frame. Bearish divergencies might signal that prices are likely to correct and that it might be advisable to exit long positions; similarly, bullish divergences could signal a trader to exit any shorts. Identifying divergences between technical indicators and price is a crucial aspect of technical trading.

Besides, it also screens the strength or depth of the market momentums that helps traders to decide on market entry and exits. This scalping tool can be applied to trade all kinds of forex currency pairs. Bill Williams combines two simple moving averages, the 5 period simple moving average and the 34 period simple moving average. Awesome oscillator uses the 34-period and 5-period simple moving average while the MACD indicator uses 26-period and 12-period exponential moving averages along with the 9-period signal line. When there are two momentum peaks below the zero-line, it is called a bullish twin peak, and some traders believe a green bar following the second peak signifies a potential break above the zero-line. One of the standard AO signals is the slope of the bars with their color changing.

Do this by giving it a test drive with a demo trading account. The script identifies RSI divergences, similar to other public scripts; however, RSI failure swings are also distinguished. When a failure swing is identified, the script calculates the highest RSI measurement or the lowest RSI measurement between the two RSI pivot points. I had the idea of creating an Awesome Oscillator for my Ultimate MA, just to see what kind of signals it might produce. If you’re not familiar with my UMA you should go take a look at it, but essentially it is just an average of eight different length MAs, and if you’re not familiar with the Awesome…

When the price draws a new extreme, and the Oscillator shows the opposite dynamics, this indicates a fading trend and a high probability of movement in the opposite direction. You can implement the strategy using only one Awesome Oscillator, but it won’t be enough to confirm your predictions. Anyway, Awesome indicator proved its efficiency for predicting upcoming trend changes even on short time frames and can be successfully combined with other trading tools and indicators. We take profit at the earliest sign that the market is showing us the first sign of weakness. In this regard, when the AO histogram posts two consecutive red bars we want to close our position and take profit as there is a high probability the market will reverse from thereafter.