Awesome Oscillator explained simply and understandably. Better than the MACD histogram?


Awesome Oscillator explained simply and understandably. Better than the MACD histogram? with David Moadel welcome to looking at the markets with
David Modell here’s an indicator you might not have known about or thought
about I’m on a quest to cover all the indicators I’ve made videos on I think
all of them MACD stochastics RSI Bollinger Bands view app I’ve covered so
many of them I’m gonna put in the description below this video a playlist
with my indicator videos and there are a lot of them so please enjoy them check
them all out by all means alright so this one is called the awesome
oscillator it looks pretty awesome the awesome oscillator is a momentum
indicator created by Bill Williams yeah I noticed it’s not much of a of an
oversold overbought indicator like Bollinger Bands might be or RSI or one
of those or stochastics this one is mostly from what I’ve seen used as a
momentum indicator although you can use it however you like here’s the formula I
got this from trading Viacom so I want to give them credit and if you know what
all this means hey awesome cool more power to you you don’t actually have to
know every single detail of every formula that you use as long as you know
how to use it I believe I like to keep it simple so what is the awesome
oscillator it is a series of green and red bars not these things these are the
candlesticks it’s down here it’s below the chart and again this is from trading
veoh.com I want to give them credit so it’s a series of green and red bars
below the chart and here’s what it looks like on an apple 5-minute candlestick
chart but you can use it for doesn’t have to be for the five-minute chart
swing traders can use it for the daily candlestick chart whatever you like
alright so here’s what it looks like and let’s talk about it alright so a bar and
I’m not talking about the candlesticks talking about these bars here a bar is
green when its value is higher than the previous bar so if the value of the bar
according to this formula okay if the value of the bar the current bar is
higher than the value of the previous bar then it’s going to be green and a
bar is red when its value is lower than the previous bar according to the
formula pretty simple and this middle line here it’s called the zero line zero
line as we can see there it is it’s on value zero it goes up to one and all the
way down to negative one and the fractions are in between or the decimals
so how do you how can you use this well it’s really similar to the MACD
histogram and I have a video on that it’s in my playlist which is in the
description below this video yeah it’s similar to the MACD histogram
it’s bullish meaning the momentum is up when the bars cross above the zero line
this is the zero line right here in the middle so when it when it’s below but
then crosses above the zero line then that’s an indication that the momentum
is upwards and that’s supposedly bullish it’s a bullish sign and it’s bearish
meaning the momentum is down when the bars cross below the zero line so the
bars are above the zero line in the cross below that means that the momentum
is downwards and that supposedly is a bearish sign a bearish indication all
right so don’t get confused by the color of the bars just because the bars are
green that doesn’t mean that it’s above the zero line I mean if you get a lot of
green bars in in a row you know a bunch of consecutive green bars eventually
it’s probably going to cross above the zero line okay but just because the bars
are green doesn’t mean that it’s above the zero line all right you have to
watch for the location of the bars watch them go above all right when you
like this hill here like a mountain alright
that’s when it’s above the zero line and when you get this underground valley
looking thing then it’s below the zero line and just because it’s red doesn’t
mean it’s below the zero line it could be red but above the zero line green
just means how the bar is the current bar in relation to the previous bar
that’s all and that’s what red also means green means the current bar has a
higher value than the previous bar and red just means that the current bar has
a lower value than the previous bar okay so pretty simple and let’s check out
some examples here or at least one example I showed you the Apple example
this is tradingview calm I like it and it’s a good charting website I like a
bunch of charting websites I like bar chart calm I like stockcharts.com and
today I tried I’m trying tradingview why not so we can see it would have worked
pretty well here this is US Steel 5-minute candlestick chart and we can
see that it crossed above the zero line here on the awesome indicator and so
that could have been a buy signal right about here and you would have done
pretty well nice run up right that doesn’t mean that it works every time
but it seemed to work pretty well here it also crossed above here right about
right about here and then you would have enjoyed a little run up in the price
there not too bad and then you could possibly sell or even go short when it
goes when it dips below the zero line shorting is a risky proposition yeah I’m
not gonna rent I’m not gonna recommend that for beginners but anyway so it
could be a possible buy and sell signal based on momentum not so much overbought
and oversold although I’m sure there’s an application for that as well alright
so those are the basics with the awesome oscillator
do you like it do you like the awesome oscillator do you think it’s an
interesting alternative to the MACD histogram because it is pretty similar
at the way it looks in the way it works not
the formulas so much but the appearance at least is similar to the MACD
histogram so if you liked this video please give it a thumbs up on YouTube
and leave a comment what indicators indicators do you like do you like the
awesome oscillator leave a comment below this video and please subscribe to my
You Tube channel and hit that Bell on youtube so you can receive the latest
updates on my financial educational videos and if you want some help with
indicators or putting together a trading or investing plan because you got to
have a plan otherwise you’re asking for problems you can email me anytime I like
to help people my email address is David Modell at gmail.com thank you so much I
appreciate it and I’ll talk to you again soon

16 thoughts on “Awesome Oscillator explained simply and understandably. Better than the MACD histogram?”

  1. Thanks for the video, David. I love the AO. If u blend it with a particular setup of the MACD the signals are great on shorter timeframes.

  2. subscribed. A good, short, simple and very informative video. These are the best as they are straight to the point and allows the viewership to maintain concentration.

  3. Thank you David for this wonderful indicator. I had to subscribe. Please keep as updated and I will play with this tomorrow.

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