What is Awesome Oscillator? How to identify trends using Awesome Oscillator Indicator?

What is Awesome Oscillator?

      Awesome Oscillator is one of the technical Indicator, which is a 34-period SMA, plotted during the mid points of the candles that is (High+Low)/2, which is subtracted from the 5-period SMA, built crossways the mid points of the candles that is (High+Low)/2.

Buy Signal:

Awesome Oscillator provides three types of Buy signals which are as follows.

• Saucer: Buy when the candle chart is upper than the nought line.
• Nought Line Crossing: It provides buy signal when the candle chart passes from negative area values to positive area values. It occurs when the candle chart crosses the nought line.
• Two Pikes: It provides buy signal while the candle chart values are under the nought line.

Sell Signal:

      Awesome Oscillator sell signals are same to buy signals. Saucer signal is upturned and is less than zero. Nought line crossing is on the decline. Two pikes signal is upper than the nought line and is upturned too.

Calculation:

           Median Price = (High+Low)/2
           AO = SMA(Median Price, 5)-SMA(Median Price, 34)

SMA – Simple Moving Average