/2/13 · What is Awesome Oscillator Indicator? The Awesome Oscillator indicator is a histogram – that is similar to the MACD indicator - displaying the market momentum of a recent number of periods compared to the momentum of a larger number of previous blogger.comted Reading Time: 7 mins /4/21 · The Awesome Oscillator (AO) is an indicator used to measure market momentum. AO calculates the difference between a 34 Period and 5 Period Simple Moving Average. The Simple Moving Averages that are used are not calculated using closing price but rather each bar's midpoints /10/19 · On the other side, the awesome oscillator is a histogram trading indicator that compares the current 5 bars with the 34 bars of the wider trends, based on the Awesome oscillator formula. The Awesome Oscillator is created to detect the bearish or bullish blogger.comted Reading Time: 1 min
Awesome Oscillator + RSI Forex Strategy - Catch the Momentum Turns
Build your trading muscle with no added pressure of the market. Explore TradingSim For Free » Awesome Oscillator. With names floating around as complex and diverse as moving average convergence divergence and slow stochasticsI guess Awesome indicator forex was attempting to separate himself from the fray. In this article, we are going to attempt to better understand why Bill felt his indicator should be considered awesome by evaluating the three most common AO trading strategies and a bonus strategy, which you will only find here at Tradingsim.
Well by definition, the awesome oscillator is just that, an oscillator. While on the surface one could think the awesome oscillator indicator is comprised of a complicated algorithm developed by a whiz kid from M. To my earlier point, if you have a basic understanding of math, you can sort out awesome indicator forex awesome oscillator equation.
The formula compares two moving averages, awesome indicator forex, one short-term and one long-term. Comparing awesome indicator forex different time periods is pretty common for a number of technical indicatorsthe one twist the awesome oscillator adds to the mix, is that the moving averages are calculated using the mid-point of the candlestick instead of the close.
The value of using the mid-point allows the trader to glean into the activity of the day. If there was a ton of volatility, the mid-point will be larger, awesome indicator forex. If you were to use the closing price and there was a major reversal, you would have no way awesome indicator forex capturing the volatility that occurred during the day. One point to clarify, while I listed x in the equation, the common values used are 5 periods for the fast and 34 periods for the slow.
It is as simple as it is elegant. Basically, it is a bar simple moving average subtracted from a 5-bar simple moving average. You, however, reserve the right to use whatever periods work for you, hence the x in the above explanation. Depending on your charting platform, the awesome oscillator indicator can appear in many different formats. Nevertheless, the most common format of the awesome oscillator is a histogram.
The awesome oscillator indicator will fluctuate between positive and negative awesome indicator forex. A positive reading means the fast period is greater than the slow and conversely, a negative is when the fast is less than the slow. The one item to point out is that the color of the bars printed represent how the awesome oscillator printed for a period.
Hence, you can have a green histogram, awesome indicator forex, while the awesome oscillator is below the 0 line. If you use this strategy awesome indicator forex itself, you will lose money. I hate to speak in such absolutes, but to trust an indicator blindly without any awesome indicator forex confirming analysis is the quickest way to burn through your cash.
Therefore, the strategy, if you want to call it that, calls for a long position when the awesome oscillator goes from negative to positive territory. Conversely, awesome indicator forex, when the awesome oscillator indicator goes from positive to negative territory, a trader should enter a short position. Without doing a ton of research, you can only imagine the number of false readings you would receive during a choppy market.
In the awesome indicator forex example, there were 7 signals where the awesome oscillator indicator crossed the 0 line. Out of the 7 signals, 2 were able to capture sizable moves. This 5-minute chart of Twitter illustrates the main issue with this strategy, which is that the market will whipsaw you around like crazy. Choppy markets plus oscillators equal fewer profits and more commissions. The saucer strategy received its name because it resembles that of a saucer. The setup consists of three histograms for both long and short entries.
No more panic, no more doubts. make the right decisions because you've seen it with your trading simulator, TradingSim. Learn About TradingSim Awesome Oscillator is above 0 There are two consecutive red histograms The second red histogram is shorter than the first The third histogram is green A trader buys the fourth candlestick on the open Short Setup.
Without going into too much detail, this sounds like a basic 3 candlestick reversal pattern that continues in the direction of the primary trend. Awesome indicator forex the above example, awesome indicator forex, AMGN experienced a saucer setup and a long entry was executed, awesome indicator forex. The stock drifted higher; however, I have noticed from glancing at a number of charts, the buy and sell saucer signals generally come after a little pop. If you trade the saucer strategy, you have to realize you are not buying the weakness, so you may get a high tick or two when day trading.
The saucer strategy is slightly better than the 0 cross, because it requires a specific formation across three histograms. Naturally, this is a tougher setup to locate on the chart. However, you can find this pattern when day trading literally dozens of times throughout the day. I get that we are attempting to locate a continuation in the trend after a awesome indicator forex breather in the direction of the primary trend, but again the setup is just too simple.
Due to the number of potential saucer signals and the lack of context to the bigger trend, I am giving the saucer strategy a D, awesome indicator forex. As you have probably already guessed, of the three most common awesome oscillator strategies, I vote this one the highest.
Reason being, the twin peaks strategy accounts for the current setup of the stock. Awesome indicator forex twin peaks are also a contrarian strategy as you are entering short positions when the indicator is above 0 and buying when below 0. Going back to the crossing of the 0 line, what if we could refine that a little to allow us to filter out false signals, as well as buy or short prior to the actual cross of the 0 line.
This approach would keep us out of choppy markets and allow us to reap the gains that come before waiting on confirmation from a break of the 0 line. As you can see in the above example, by opening a position on the break of the trendline prior to the cross above the 0 line, you are able to eat more of the gains. The other point to note is that the downward sloping line requires two swing points of the AO oscillator and the second swing point needs to be low enough to create the downward trendline.
In this example the cross down through the uptrend line happened at the same time there was a cross of the 0 line by the AO indicator. After the break, the stock quickly went lower heading into the 11 am time frame.
My new awesome indicator forex now awesome indicator forex going through all awesome indicator forex indicators and finding where things fail. I think finding the blind spots of an indicator can be just as helpful as displaying these beautiful setups that always work out.
If you are a contrarian trader, awesome indicator forex, a high value in the AO may lead you to want to take a trade in the opposite direction of the primary trend. This is where things can get really messy for you as a trader. Even if the AO keeps you on the right side of the trade with a high winning percentage, awesome indicator forex, you only need one trade to get away from you and blow up all of your progress for the month.
I normally markup charts on the blog but in this example, I would like you to identify the three peaks in the AO indicator. As you can see in the chart provided by Tradingsim. In addition, the AO was spiking like crazy and the rally did appear sustainable. This would have represented a move against us of Now if you are day trading and using a lot of leverageit goes without saying how much this one trade could hurt your bottom line. So, how to prevent yourself from getting caught in this situation?
First, a major expansion of the awesome oscillator indicator in one direction can signal a really strong trend. So, do yourself a favor and do not stand in front of the bull. Secondly, use stops when you are trading.
There is no reason you should ever let the market go against you this much. Recently, I have been backing off of the low float stocksbecause I am able to scale in with larger size with low volatility plays. However, I know low float movers is a big deal in the day trading community. This is one of those charts that would have me pulling my hair out.
Next, awesome indicator forex, EGY spikes lower giving the impression the stock was going to fill the gap. Wrong again, as EGY only consolidates leaving you with a short position that goes nowhere. Lastly, EGY breaks the morning high all the while displaying a divergence with the awesome oscillator and the price action. In every instance, the indicator is giving off false signals and leaving you on the wrong side of the trade. You as a trader need to be prepared for the awesome indicator forex reality of trading low float stocks.
These securities will move erratically, with volume and in a very short period of time. In a awesome indicator forex article on Stocktwits Blog [4]see how day trader Dave Kelly describes trading low float stocks and the level of volatility with these securities.
Also, lower your expectations about how accurately the oscillator can create price boundaries which a low float will respect, awesome indicator forex. Shifting gears to where the awesome oscillator is likely to give you more consistent signals — the futures markets.
The reason the awesome oscillator indicator works so well with the e-Mini is that the security responds to technical patterns and awesome indicator forex more consistently due to its lower volatility. Notice how these AO high readings led to minor pullbacks in price. Now, these are not going to make you rich, but you can capitalize on these short-term trends.
There were still a few signals that did not work out, so you will need to keep stops as a part of your trading strategy to make sure your winners are bigger than your losers. So out of the trading strategies detailed in this article, which one works best for your trading style? You may find that you like the idea of drilling into where the awesome oscillator indicator fails to uncover trading opportunities.
I think no matter what strategy you lock in on, you will want to make sure you use stops in order to protect your profits. The last point I will leave you with is to look at different types of securities to see which one fits you the best. Want to practice the information from this article? get trading experience risk-free with our trading simulator. November 9, at am, awesome indicator forex.
Thanks AL for sharing your insights and analysis reference the awesome oscillator. It was valuable for me and much appreciated. January 7, at am. May 16, at pm. Thank you for this fun to read explanation of the AO.
I also like that you show where things can go wrong. Keep making them brokers poor!
�� Top 3 Best Awesome Oscillator Trading Strategies (This is What You Must Know...)
, time: 7:27Awesome Oscillator Formula - Forex Education
Awesome Oscillator + RSI Forex Strategy – Catch the Momentum Turns. Using the Awesome Oscillator developed by Bill Williams with the RSI (relative strength index) combines the power of measuring momentum with the Awesome Oscillator Indicator and overbought or oversold conditions with the RSI. The Awesome Oscillator (AO) may be new to some traders Estimated Reading Time: 5 mins /4/21 · The Awesome Oscillator (AO) is an indicator used to measure market momentum. AO calculates the difference between a 34 Period and 5 Period Simple Moving Average. The Simple Moving Averages that are used are not calculated using closing price but rather each bar's midpoints /5/20 · extended by Mrtools. it includes a lot of features and options,depends on your taste and requirement,you can adjust it and form it where you want it to be,extremely flexible regarding to form in any situation,again depends on users ability and experience. might be it help you and or others
No comments:
Post a Comment