The Extended Awesome Oscillator is an MT4 trend indicator that examines the strength of the market momentum and determines the trend-reversal conditions.
This indicator counts the number of periods passed since the price created a high and a low, then transforms the data into trend signals. Unlike the original version, the Extended Awesome Oscillator responds quicker to price-action changes and offers real-time trend-reversal alerts.
The Extended Awesome Oscillator applies colored bars and a signal line for demonstrating trend overviews.
It applies a 5-period fast EMA, 34-period slow SMA, and a 5-period Signal MA for determining the current trend position. Here, we’ll consider the changes in the bar’s colors and the positivity/negativity of the indicator value to anticipate the trade signals.
The bars representing the indicator value are highly sensitive to price movements. On the other hand, the signal line provides an average value of the bars.
When the AO bar turns green, carrying a positive value, we consider a bullish trend is imminent. The bars become red move lower than the signal line means the current bullish trend is turning weaker.
So, if you are on a long order already, you may consider exiting it once you notice the market is losing its bullish momentum.
An increase in the distance between the AO-signal line and its bars suggests higher market volatility.
Extended Awesome Oscillator for MT4: Buy Conditions
- The AO Bar turns green and rises above the zero-line
- The AO signal line shows a positive value
- Exit long when the AO signal line moves to the negative zone
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Extended Awesome Oscillator for MT4: Sell Conditions
- The AO bars become red and show up below the zero-line
- The AO signal line moves to the negative zone
- Exit short when the signal line values become positive