You know, I got really into the Awesome Oscillator after Bill Williams shared his insights on the markets. He refers to it as the AO, and I'm telling you, it's a "top-notch momentum indicator" for stocks and commodities. Honestly, it’s a clever formula—the difference between a 34-bar simple moving average and a 5-bar simple moving average. This tool works great in any market, whether it’s stocks, commodities, indices, or currencies—you name it.
Now, here’s the deal: experienced traders see the potential for profits when trends reverse, while newcomers often find themselves on the sidelines, anxious about sudden market changes. But let me tell you, in binary options trading, your success isn’t just about the price levels. It’s all about whether you got your trend prediction right. Those binary options? They come down to a straightforward “yes or no.” If it expires in the money, you score a payout; if not, you take a loss.
When it comes to spotting those trend reversals, you better believe I trust the Awesome Oscillator. If you’re looking to enhance your trading experience with the innovative PocketOption broker platform, you’ll find the AO nestled among the standard indicators. Just look for it on the list and click “+” to get started.
Getting to Know the Awesome Oscillator
This oscillator earned the “Awesome” title for a reason—it’s truly impressive! Bill Williams himself claimed it was his best invention. Plus, let’s not forget he created some other big players like the Alligator, Accelerator, Percent Range, and Fractals.
Like other standard oscillators, the Awesome Oscillator appears in a separate window below your price chart. It’s essentially a histogram that toggles around that zero line.
To break it down, the AO compares the most recent five bars against a wider look at the last 34 bars. The value of the indicator is calculated by the difference between these two moving averages—except, instead of closing prices, it focuses on those midpoints (you know, halfway between the high and low).
If you're tweaking the settings in the Pocket Option platform, just navigate to Indicators/Active, select Awesome Oscillator, and click on the pencil icon.
Once you’ve set everything up and it’s working smoothly, you can integrate it into your binary options trading strategy.
Integrating the Awesome Oscillator Into Your Trading
The AO fluctuates between positive and negative zones. A positive reading? That’s when the fast period is above the slow one. A negative reading? You guessed it, that’s when the fast dips below the slow.
The AO histogram crossing above that zero line signals bullish momentum. If it drops below, you can expect bearish sentiment.
While you’re trading on your platform, watch for color changes in the Awesome Oscillator—it’s your cue for a trend change.
To keep it simple, here are some basic rules:
- Choose a CALL option when the histogram rises from the bottom to the top, with a new bar forming above the zero line.
- Select a PUT option when the histogram falls to the lower range and a bar is created below that zero level.
The Awesome Oscillator is adaptable—it works across any timeframe and is great for turbo options, but be cautious of false signals in a volatile market.
The ideal expiration time should exceed the duration it takes to form a couple of candles.
This oscillator can also detect divergence, so consider it an added signal for your trades. But listen, you’ve got to be ready for the trading hustle. If you’re new to it, dive into the AO indicator and see how it interacts with other indicators. Give it a go on a demo account at Pocket Option to see if it suits your style.
