Forex Indicator MT4

# Awesome Oscillator (AO)

What is Awesome Oscillator (AO) indicator, the instructions of Awesome Oscillator (AO) and how to use the Awesome Oscillator (AO) indicator, the calculation of Awesome Oscillator (AO) and the Awesome Oscillator (AO) indicator main parameters

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## Introduction

The Awesome Oscillator is a histogram showing the market momentum of a recent number of periods compared to the momentum of a larger number of previous periods (by default, 5 vs. 34 periods).

This indicator is intended to show what’s happening to the market for the current period (compared to the momentum of a longer period), and some traders use its signals for buying and selling decisions.

Awesome Oscillator (AO) is simply the difference between the 34-period and 5-period simple moving averages of the bar’s midpoints (H+L)/2. Awesome Oscillator (AO) is displayed on the chart as a histogram:

## Calculation

AO is a 34-period simple moving average, plotted through the central points of the bars (H+L)/2, and subtracted from the 5-period simple moving average, graphed across the central points of the bars (H+L)/2.

`MEDIAN PRICE = (HIGH+LOW)/2 AO = SMA(MEDIAN PRICE, 5)-SMA(MEDIAN PRICE, 34)`

Where:

• Saucer – Occurs if (and only if) the bar chart is above the 0-line, and the bar chart has reversed its direction from downward to upward (concave upwards). The saucer occurs if, in any three columns, the second column is lower than the first and colored red and the third column is higher than the second and colored green.
• Nought line crossing – Occurs when the bar chart crosses the 0-line in a positive direction. That is, it passes from the area of negative values to that of positive values.
• Two pikes – Occurs when a pike below the 0-line pointing downwards (the lowest minimum) is followed by another downward-pointing pike that is somewhat higher (closer to the 0-line). This is the only signal to buy that falls below the 0-line.

## Signals to sell

Some traders use the reverse of the signals to buy as signals to sell. That is:

• The saucer signal reversed (concave downwards) and below the zero-line.
• The nought line crossing on the decrease – the first column over the 0-line, the second under it.
• The two pikes signals above the 0-line and the pikes pointing upwards (the first one higher than the second).