Accelerator\/Decelerator Indicator<\/h4>\n
The Acc\/Dec Indicator measures the momentum of the Awesome Oscillator. \u00a0This is useful because it shows us whether price momentum is speeding up or slowing down. \u00a0Like the Awesome Oscillator it uses green and red bars to show whether it is rising or falling.<\/p>\n
How to Trade Using the Awesome Oscillator and Acc\/Dec Indicator<\/h2>\n
In his book, New Trading Dimensions, Bill Williams sets out his method of trading using these two indicators.<\/p>\n
Awesome Oscillator<\/h4>\n
Awesome Oscillator buy signals are created when the indicator:<\/p>\n
- \n
- Crosses from below 0 to above 0<\/li>\n
- When the oscillator is above the 0 line. \u00a0The oscillator changes from green (upward movement) to red (downward movement) and back to green again.<\/li>\n
- When the oscillator is below the 0 line. \u00a0The oscillator makes a higher low and turns from red to green.<\/li>\n<\/ol>\n
Awesome Oscillator selling signals are created when the above buy signals are reversed.<\/p>\n
Accelerator\/Decelerator Indicator<\/h4>\n
Acc\/Dec Indicator buy signals are created when the indicator:<\/p>\n
- \n
- When the indicator is above the 0 line. \u00a0The indicator changes from red to green and then has two consecutive green bars.<\/li>\n
- When the indicator is below the 0 line. \u00a0The indicator changes from red to green and has three consecutive green bars.<\/li>\n<\/ol>\n
The Acc\/Dec indicator sell signals are created when the above buy signals are reversed.<\/p>\n
Putting it Together<\/h4>\n
The next part of Bill William\u2019s trading method is the most interesting to me. \u00a0He recommends trading aggressively when the market is moving in your favour.<\/p>\n
If you have entered a long position based on one of the indicators and the next time period shows both the AO and AC green and also the market has closed higher\u00a0then you should add to the position. \u00a0If the following time period also has a green AO, green AC and higher close then you should again add to the position. \u00a0This process should be continued up to a maximum of five positions.<\/p>\n
I like this method because it forces us to be brave when most peoples instinct is to close out the position to protect the profit gained.<\/p>\n
The trading strategy of adding to a winning position is the method used by\u00a0Jesse Livermore in the excellent book,\u00a0Reminiscences of a Stock Operator
.\u00a0 This mindset is summed up in the following quote:<\/p>\n
Source = https:\/\/www.tradinformed.com\/how-to-trade-and-calculate-awesome-oscillator-acc-dec-indicator\/<\/p>\n
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The Awesome and Acc\/Dec Indicator are an interesting pair that are normally used together. Awesome Oscillator Despite the cool name, the Awesome Oscillator is a very simple indicator. \u00a0As I set out in the video below, it is actually just … Continue reading