Tools & IndicatorsAwesome Oscillator
OscillatorsIntermediate[ MP.IND.AWESOME_OSCILLATOR ]
Awesome Oscillator
Awesome Oscillator (AO)
The Awesome Oscillator, created by Bill Williams in the context of his 'Chaos Theory', measures momentum by comparing two SMAs of the median price.
Category
Oscillators
Difficulty
Intermediate
Markets
Forex, Stocks, Crypto
Timeframe
1H, 4H
Combinations
2 tools
Signals
4 setups
LIVE CHARTAwesome Oscillator ACTIVE
[ HOW TO READ THE CHART ]
Green Zone: AO cross above 0 → Bullish momentum: long signal
Red Zone: AO cross below 0 → Bearish momentum: short signal
Main Line: Bullish Twin Peaks (two lows, the second higher) → Long entry
Confluence: Combine Awesome Oscillator with MACD for maximum probability
[ WHAT TO WATCH ON THE CHART ]
Observe how Awesome Oscillator behaves relative to key price points. Note moments when the indicator reaches extreme levels and how price reacts. Look for divergence patterns between the indicator and price movement.[ FORMULA ]
AO = SMA(5, Midpoint) - SMA(34, Midpoint) Midpoint = (High + Low) / 2
What signals does Awesome Oscillator generate?
AO cross above 0 → Bullish momentum: long signal
AO cross below 0 → Bearish momentum: short signal
Bullish Twin Peaks (two lows, the second higher) → Long entry
Bullish Saucer (3 green bars, central one lower) → Precise long entry
What is Awesome Oscillator and how does it work?
The Awesome Oscillator, created by Bill Williams in the context of his 'Chaos Theory', measures momentum by comparing two SMAs of the median price. The colored histogram is the key: green when it rises relative to the previous bar, red when it falls. Bill Williams defined three specific, very precise setups that remain among the most studied patterns by enthusiasts of his Profitunity system.
How do you use Awesome Oscillator in trading?
AO has three specific setups:
1) ZERO CROSS: AO crosses the zero line upward = long signal. Downward = short signal.
2) TWIN PEAKS: Two consecutive peaks/troughs. Bullish Twin Peaks: two consecutive lows of AO (both below zero), with the second low ABOVE the first, separated by at least one green bar. Buy signal.
3) SAUCER: Three consecutive bars of the same color (all green or all red), with the central bar lower (green) or higher (red). Very precise as timing.
What are the strengths of Awesome Oscillator?
Very precise and defined setups
Visually clear
Part of a complete system (Williams)
What are the limitations of Awesome Oscillator?
Less common than other oscillators
Requires specific knowledge of the 3 setups
Limited without the rest of the Williams system
[ RELATED INDICATORS ]
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