Momentum oscillator
Awesome Oscillator (AO)
A histogram of market momentum built from two moving averages of the midpoint.
What is Awesome Oscillator (AO)?
The Awesome Oscillator (AO), created by Bill Williams, measures momentum as the difference between a fast and slow simple moving average of each bar's midpoint. It's drawn as a histogram around a zero line.
How it works
When the histogram is above zero, short-term momentum exceeds longer-term; below zero, the reverse. Signals include zero-line crossovers, the 'twin peaks' divergence pattern and the 'saucer' setup. It's often used alongside trend tools for confirmation.
How traders use it
- ▸Zero-line cross: momentum-shift signals.
- ▸Twin peaks: a divergence-style reversal pattern.
- ▸Saucer: a fast momentum-change entry.
- ▸Confirmation: align AO with the prevailing trend.
Build Awesome Oscillator (AO) without code in Algovex
The Awesome Oscillator is a node in Algovex, trade its zero-cross or pattern signals, combine with a trend filter, backtest, and export.
Key parameters
| Parameter | What it does |
|---|---|
| fastLength | Fast SMA period (commonly 5). |
| slowLength | Slow SMA period (commonly 34). |
Frequently asked questions
What does the Awesome Oscillator tell you?
It shows whether short-term momentum is stronger than longer-term momentum. Above zero is bullish momentum, below zero bearish, with crossovers and the twin-peaks/saucer patterns as signals. Algovex provides it as a node to backtest.