What it is
Bill Williams designed the Awesome Oscillator as a simple momentum gauge. It compares where the market has been trading over the last 5 candles with where it has traded over the last 34, using the midpoint of each candle rather than the close.
The histogram is coloured by direction: a bar higher than the one before is coloured as rising, a lower bar as falling. It has no settings to tune in WickSpeak; the 5 and 34 lengths are fixed, as in the original.
How it is calculated
1. Midpoint of each candle = (high + low) divided by 2. 2. Take the simple average of the midpoint over the last 5 candles. 3. Take the simple average of the midpoint over the last 34 candles. 4. AO = the 5 candle average minus the 34 candle average. 5. Colour each bar as rising if it is higher than the previous bar, falling if lower.
How to read it
How to trade it
- 1
On a 1 hour gold chart, confirm the trend first, for example price above a 50 period average.
- 2
Buy on the first candle that closes with AO crossing above zero, or on a saucer above zero.
- 3
Place the stop below the most recent swing low, often 10 to 15 points on 1 hour gold.
- 4
Target 2 times the stop, or exit when AO prints two falling bars below zero.
- 5
On US30 use the same rules for sells when the trend is down.
A zero cross buy is proved wrong if AO crosses back below zero within a few candles or price closes below the swing low under your stop.
WickSpeak runs in your browser with nothing to install. When you add the Awesome Oscillator, it writes a plain-English reading on the live candle: what the indicator is, what it is doing right now, how to trade it and what would prove that reading wrong. It says whether AO is above or below zero, whether the bars are growing or shrinking, and what that means for the move in front of you.
In Playbook, our no-code strategy builder, the Awesome Oscillator can be a condition in a play. It can test whether the Awesome Oscillator: crosses above zero; crosses below zero; is above zero; is below zero; is rising; is falling. Each condition can run on any of 12 timeframes from 1 minute to weekly, combined with up to 11 others, and the play can be backtested on past candles with your own costs and turned into alerts on screen, by email or by phone push.
Best markets and timeframes
Works on gold, indices and forex on 15 minute to daily charts. On 1 to 5 minute charts zero crosses come too often to trade alone.
Common mistakes
- Taking every zero cross in a sideways market, where AO flips back and forth.
- Confusing bar colour with direction: a falling bar above zero still means momentum is above its average, just weakening.
- Using AO against the trend without a level or pattern to back it up.
Works well with
Questions traders ask
What are the settings for the Awesome Oscillator?
The standard AO uses a 5 and a 34 period simple average of the candle midpoint. WickSpeak keeps those fixed, so there are no settings to change.
Is the Awesome Oscillator the same as MACD?
They are similar ideas. MACD subtracts a 26 period exponential average of the close from a 12 period one and adds a signal line. AO uses simple averages of the midpoint over 5 and 34 candles and has no signal line.
What is the saucer signal?
A saucer buy is three bars above zero where the first two fall and the third rises. It shows a small pause in momentum that is now picking up again in the trend's direction.
Who created the Awesome Oscillator?
Bill Williams, who also created the Alligator, Fractals and the Accelerator Oscillator. They were designed to be used together.