The Acceleration Indicator seeks to go one step further and detect early changes in momentum — that is, when momentum is accelerating or decelerating. So Williams contended that before the trend in the price changes, the direction of momentum will change, and that even before this, there will be an acceleration change in momentum.
The Awesome Oscillator compares a 5-period time frame to a period time frame, in order to gain insight into market momentum. This is summarised by the following equation:. Naturally, keeping tabs of the value of the Acceleration Oscillator, as a derivative of another indicator that itself uses multiple moving averages , would be irksome in the extreme, by way of manual calculations.
The good news is, of course, that manual calculations are not needed, because MetaTrader 4 will take care of it all for you. Using the Acceleration Oscillator in MetaTrader 4 is straightforward, as it comes as one of the standard indicators bundled with the platform. Although it is an oscillator, the Accelerator Oscillator is classified in MT4 as being a Bill Williams indicator first and foremost. Therefore, it's in the Bill Williams folder in MT4.
In fact, it is the first listed item in that folder within MT4's 'Navigator' as shown in the image below:. Double-clicking on 'Accelerator Oscillator' launches a dialogue window as shown above. As you can see, there isn't a great deal for you to configure there. The main choice is simply the look and feel of the histogram, with a choice of colours and line thickness. The default colours are:. The Accelerator Oscillator Forex chart appears as a separate histogram beneath the main chart.
Notice how the sharpest rise in the price on the chart corresponds to successive green bars above the zero line of the Accelerator Oscillator? Also, pay attention to how the uptrend continues after this point. In the middle of the chart, when the price first begins to decline, we get successive red bars in the Accelerator Oscillator below the zero line.
Notice how a general downtrend persists after this point? Some of the key trading rules for using the Accelerator Indicator revolve around just these kinds of patterns. In Williams' words, "the zero line is the place where the momentum is balanced with the acceleration". What does this mean? Well, when the indicator is above the zero line, it is easier for acceleration to continue to increase.
Conversely, when the indicator is below zero, it is easier for deceleration to increase. Unlike the Awesome Indicator, crossing the zero line is not a trading signal in itself, but it does mean a change in the pattern we need to see in order to be confident of placing a trade. The simplest use of the indicator is really very easy to follow. Positive values are a sign of bullishness in the market. Similarly, negative values suggest bearishness in the market.
Williams stressed that with the Accelerator Oscillator, you must not buy if you are seeing a red bar, and you must not sell if you are seeing a green bar. You also need to keep an eye on both the colour of the indicator, and whether the values are above or below zero. Here is a simple summary of the rules for the Accelerator Oscillator strategy, as originally instructed by Bill Williams: If you are buying above zero or selling below zero, the momentum is with you.
You only need two successive bars of agreement to open a trade. That is, two green columns in a row above zero is a buy signal, while two red columns in a row below the zero line is a sell signal. If you are buying with the indicator below the zero line, or selling above the zero line, the momentum is against you.
This requires extra confirmation, and consequently, you should look for three successive bars to open a trade. That is, three consecutive red bars that are required to sell above the zero line. Likewise, three consecutive green bars are required to buy below the zero line. Williams himself suggested using the Alligator Indicator as the biggest arbiter of whether to trade or not.
The Awesome Oscillator and the Accelerator Oscillator can then operate as more sensitive tools, for providing specific signals within the big picture indication painted by the Alligator Indicator. Of course, your options for improving the performance of this indicator aren't restricted to combinations with other Bill Williams indicators. Potentially any indicator may offer a helping hand to your Accelerator Oscillator strategy, so it's worth gaining access to as wide selection as you can.
If you are aiming to maximise your options in this area, you'll likely benefit from upgrading to MetaTrader Supreme Edition. MTSE is a custom plugin for MetaTrader 4 and MetaTrader 5 , compiled and developed by professionals, to offer a much more comprehensive suite of trading tools and indicators. It's available as a free download, so why not give it a try? Base Price - the base price which serves to calculate the Accelerator Oscillator:. Level - Forex Strategy Builder uses the Level value when the logic of the indicator is:.
Use previous bar value - you have to mark Use previous bar value when the price at which you open a position is different from the Price Close of the bar and the base price of the indicator is different from the Price Open. That way, you make sure that you are using the right value of the indicator at the time of opening of the position. In this slot, Accelerator Oscillator functions as an entry filter. The logic condition of the indicator must be fulfilled the same applies to all other entry filters in order to gain permission to enter a long position.
Permission to enter a short position is granted only after the mirror logic condition of the indicator has been fulfilled. When using Accelerator Oscillator as an exit filter, it will make the strategy close the current position at the Price Close of the bar, when its logic condition is fulfilled. Forex Software Products. Table of Contents Introduction.
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|Ao ac forex||In fact, it is the first listed item in that folder within MT4's source as shown in the image below:. Legal Information. The standard Accelerator Decelerator indicator uses a concept of the average median price price of the current bar:. Unlike the Awesome Indicator, crossing the zero line is not a trading signal in itself, but it does mean a change in the pattern we need to see in order to be confident of placing a trade. If you enter the market in the direction of the driving force the indicator is higher than nought, when buying, or it is lower than nought, when sellingthen you need only two green columns to ao ac forex two red columns to sell.|
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When the AC value is near to the zero line, this means that the driving force is balanced. If Accelerator Oscillator is higher than zero, then it is usually easier for the acceleration to continue the upward movement and we can expect a rise in the market price. Normally, a green bar of the AC shows us that we can open a long position, and respectively, a red bar - that we can enter a short position. From this menu you can choose the method of calculation of MA:. Base Price - the base price which serves to calculate the Accelerator Oscillator:.
Level - Forex Strategy Builder uses the Level value when the logic of the indicator is:. Use previous bar value - you have to mark Use previous bar value when the price at which you open a position is different from the Price Close of the bar and the base price of the indicator is different from the Price Open. That way, you make sure that you are using the right value of the indicator at the time of opening of the position. In this slot, Accelerator Oscillator functions as an entry filter.
The logic condition of the indicator must be fulfilled the same applies to all other entry filters in order to gain permission to enter a long position. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website.
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Setup Bill Williams Accelerator Oscillator (AC) with Default values. When stochastic %K and %D crosses above 20, wait that AC and AO turn green. It is based on the Awesome Oscillator (AO) and measures the difference between that indicator and its 5-period moving average, effectively showing how quickly. Share ideas, debate tactics, and swap war stories with forex traders from around the world.