What is a saucer signal?

A saucer forms when AO is above zero and has three consecutive bars where the middle bar is lower, followed by a higher bar. It signals continuation.

Key Takeaways

Difficulty:Intermediate

Reliability:Moderate

Category:momentum

Timeframes:1H, 4H, Daily

Awesome Oscillator (AO)

momentum📊 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

Trading Setup Example

Entry, stop loss, and take profit levels.

📈 Buy Setup

📉 Sell Setup

Always wait for signal confirmation before entering a trade.

Where This Indicator Works Best

Trend context and market position.

📈 Bullish Context

📉 Bearish Context

Detects overbought/oversold in trending and ranging markets.

Live Chart — Awesome Oscillator (AO)

See Awesome Oscillator (AO) in action on a live chart. Try changing the settings and timeframe.

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Parameters

Fast Period

Default: 5

Fast SMA period

Slow Period

Default: 34

Slow SMA period

📈 Bullish Signals

AO crosses above zero, bullish twin peaks, saucer buy signal

📉 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

Try on TradingView

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)

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MT5 MQL5 Code

C++

int ao_handle = iAO(_Symbol, _Period);

double ao[];

CopyBuffer(ao_handle, 0, 0, 100, ao);

Python Libraries

pandas-ta

Technical analysis

pip install pandas-ta

Common Mistakes

✗Trading every zero cross without confirmation

✗Ignoring the overall trend

Confirmation Signals

Alligator indicator

Price action

Volume

Best For

Trend confirmationMomentum analysisBill Williams strategies

💡 Pro Tips

•Part of Bill Williams trading system
•Histogram colors show momentum direction
•Twin peaks patterns are powerful signals

Last updated: February 8, 2026

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.

Learn More

Investopedia - Technical Indicators— Financial Education BabyPips - Technical Indicators— Trading School MetaTrader 5 Docs— Official Documentation

Frequently Asked Questions

Related Indicators

MACD (Moving Average Convergence Divergence)

MACD shows the relationship between two EMAs. Consists of MACD line, signal line, and histogram.

Williams Alligator

Three smoothed moving averages representing Jaw, Teeth, and Lips, showing trend phases.

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