Awesome Oscillator Indicator

Awesome Oscillator Indicator

Awesome Oscillator is a momentum indicator for MT5. Best for forex and stock traders looking for stable trend signals. Suitable for trend following strategies and MTF charts

The Awesome Oscillator (AO) is an MT5 momentum indicator. It closely monitors price changes, identifies market impulses and gives possible trend reversal signals.

In addition to trend signals, the Awesome Oscillator also shows changes in the strength and weakness of market momentum. Thus, in addition to identifying a trend entry, you can also use its signals to decide whether to exit a trade.

Both forex and stock traders rely extensively on momentum instruments to have a clear understanding of current trend conditions and evaluate the possibility of future trend reversals. As such, AO is quite popular with both day and intraday traders for its consistency in providing real-time trend signals.

How to determine buy-sell by using Awesome Oscillator Indicator in MT5

The Awesome Oscillator uses colored histogram bars to show momentum status. When the oscillator goes above zero, the bars turn blue, signaling bullish momentum. If the bars turn red on a close above the zero line, we believe the market is losing its bullish momentum and could turn bearish soon.

To confirm the purchase, it is better to wait for the moment when the price makes a bullish breakout and at the same time the value of the Awesome Oscillator turns positive. Once you go long, consider holding the position until the bars continue to rise and remain blue.

As the AO value begins to fall, the bars become shorter and turn red. This means that the market is losing its current bullish momentum and intends to reverse the bearish trend. In such situations, aggressive intraday traders may call for a buy-exit. If you prefer your trade to run for the long haul, it is ideal to exit a long position when the oscillator turns negative.

During a bearish trend reversal, the oscillator bars immediately drop below zero and turn red. Go short as soon as the AO confirms a downtrend in the market, at which point the price will build a bearish reversal pattern. Depending on price action, a signal could be generated that includes a bearish inside bar breakout or a bearish price breakout at a key market level. To enter a sell position, wait until the bars turn blue and the oscillator value begins to rise steadily.

The accuracy of the Awesome Oscillator signals largely depends on the nature of the market volatility. As a result, you cannot fully rely on momentum indicators during choppy or sideways market conditions. Therefore, we recommend adding other technical tools such as support/resistance levels, trendlines, moving averages along with the Awesome Oscillator for better decision making.

Conclusion
The Awesome Oscillator is a useful momentum indicator for both trend and swing traders. Beginners prefer AO for its ease of use and easy to read signals. Moreover, experienced professionals also see it as a reliable decision-making aid along with their existing trading strategies.

If you prefer to have a technical understanding of market momentum to predict trading signals, it is always ideal to have the Awesome Oscillator on your MT5 chart.