Key Takeaways
Difficulty:Intermediate
Reliability:Moderate
Category:momentum
Timeframes:1H, 4H, Daily
Awesome Oscillator (AO)
momentumš 1H, 4H, Daily
Bill Williams indicator measuring market momentum using the difference between 5 and 34-period SMAs of the midpoint.
Formula
Code
AO = SMA(Midpoint, 5) - SMA(Midpoint, 34)
Midpoint = (High + Low) / 2
Detailed Explanation
The Awesome Oscillator was created by Bill Williams as part of his trading system.
**Key Patterns:** 1. **Zero Line Cross**: Basic trend signal 2. **Twin Peaks**: Momentum divergence pattern 3. **Saucer**: Brief momentum reversal signal
Parameters
Fast Period
Default: 5
Fast SMA period
Slow Period
Default: 34
Slow SMA period
š Bullish Signals
AO crosses above zero, bullish twin peaks, saucer buy signal
š Bearish Signals
AO crosses below zero, bearish twin peaks, saucer sell signal
Python Implementation
Awesome Oscillator calculation
Python
import pandas_ta as ta
df['AO'] = ta.ao(df['high'], df['low'], fast=5, slow=34)
TradingView Pine Script
JavaScript
//@version=5
indicator("Awesome Oscillator")
ao = ta.sma(hl2, 5) - ta.sma(hl2, 34)
plot(ao, "AO", style=plot.style_histogram, color=ao > ao[1] ? color.green : color.red)
š Use TradingView for Advanced Charting
Professional analysis tools with 100+ technical indicators
MT5 MQL5 Code
C++
int ao_handle = iAO(_Symbol, _Period);
double ao[];
CopyBuffer(ao_handle, 0, 0, 100, ao);
Python Libraries
Common Mistakes
āTrading every zero cross without confirmation
āIgnoring the overall trend
Confirmation Signals
Alligator indicator
Price action
Volume
Best For
Trend confirmationMomentum analysisBill Williams strategies
š” Pro Tips
- ā¢Part of Bill Williams trading system
- ā¢Histogram colors show momentum direction
- ā¢Twin peaks patterns are powerful signals
Last updated: December 29, 2024
Educational Disclaimer
This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.