Hi Let me introduce my Bill Williams. Awesome Oscillator (AC) script. This indicator plots the oscillator as a histogram where blue denotes periods suited for buying and red . for selling. If the current value of AO (Awesome Oscillator) is above previous, the period is considered suited for buying and the period is marked blue. If the AO value is not above previous, the period is considered suited for selling and the indicator marks it as red.
HPotter, could you please add a Signal line to this indicator. It really helps identify Top and Bottoms when slope change and signal line converge plus a bearish/bullish bias. Thanks for a very useful indicator!
HPotter
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What should to show a Signal line?
cooney_s
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Here is an image with a crudely hand drawn Signal Line. Signal line can be any of the common moving averages. Simple moving average will suffice, I prefer Linear Weighted Moving Average. The Signal period would be the difference between the short and long periods of AO. With the common default of AO being short 5 and long 35, difference of the two being 30, Signal period should be set to 15. Signal line assists the AO by differentiating what kind of slope change we are experiencing ...1) Top/Bottom of Major/Minor Trend 2.) Gaps = heavy price movement 3.) Divergence Thanks!