Awesome Oscillator
The Awesome Oscillator shows whether a market is speeding up or slowing down. It was created by Bill Williams, and the idea behind it is simple: compare where price has been over the last few candles with where it has been over a much longer stretch.
When the recent average sits above the longer one, buyers have been pushing price up faster than usual, and the bars rise above zero. When it sits below, sellers have the upper hand and the bars drop under zero. The further from zero, the stronger the push.
It is drawn as a histogram, a row of bars, and each bar is coloured by what it did compared with the one before it.
Example
A long DCA trade with the Awesome Oscillator deciding every entry, using Cross Above Zero. Each amber dot is a signal, the histogram moving from below zero to above it. The base order (BO) came on a signal just as price started to roll over. As the drop went on, two safety orders (SO1 and SO2) filled lower down, each on a fresh crossing. When price recovered, the whole position closed in one take profit (TP). Two shorter trades followed, each a single base order that reached its take profit.
Settings
Two conditions worth knowing
The histogram moves from below zero to above it. Recent prices have just climbed back over the longer average, so momentum has turned from down to up. It is the clearest signal the indicator gives, and the one used in the example above. Cross Below Zero is the same moment for the short side.
The histogram is already above zero, dips for a bar or two, then turns green again. Buyers paused and are pushing again, so the trend gets a second entry without waiting for a whole new crossing. Saucer Bearish is the mirror image below zero.
The dropdown has more than these two. Histogram Turning Green and Histogram Turning Red fire on the very first bar that changes colour, the earliest sign that momentum is shifting. Each condition reads the same bars in its own way, so it is worth trying a few in Strategy Lab and seeing which one suits the coin you trade.
How the number is worked out
Every candle gets a midpoint, halfway between its high and its low. The indicator takes the average midpoint of the last 5 candles and subtracts the average midpoint of the last 34. That difference is the height of the bar.
Using the midpoint means each bar reflects the whole candle, the wicks included, and gets less thrown around by where a single candle happens to close.
Where it falls short
Pairing it with other indicators
Keeping it in context
The Awesome Oscillator reads momentum, one input among several. It shows when the push behind price is changing, and the trend, the price structure and your risk rules decide what to do with that.
Backtesting and performance stats
With six conditions to choose from, testing is where this indicator really pays off. Strategy Lab, our own tester, runs each one against past candles so you can compare them side by side, in trending markets and in quiet ones.