Final thoughts on the Bill Williams Awesome Oscillator
The Bill Williams Awesome Oscillator is an indicator that is relatively simple to use and isn’t hard to set up. In fact, it will come with any MetaTrader platform
you are using.
It’s important to remember that it isn’t a signal in and of itself. However, what it does do is give you an idea of what a couple of moving averages might look like on your chart without plotting them on your chart itself.
Remember, this is simply measuring the difference between the 5 and 34 simple moving averages. In other words, it lets you know when these widen out, and start spreading which for moving average traders suggests that momentum is picking up. The farther away from the zero line the oscillator gets, the more spread out we are and then hence should continue to see momentum.
The zero line being crossed itself is simply a function of a moving average crossover. This just means that the moving average has crossed over the other one, just as you would see on a moving average of a system that would be plotted on your chart. In that sense, the oscillator itself is just another take on moving averages overall. This isn’t to dismiss this indicator, it just shows that it is another way to express the overall momentum of the marketplace, something that can be done through a multitude of indicators.
It should be noted that price action comes first, and before that even comes into play you should be looking at support and resistance. That being said, if the market does break through a supporter resistance area, the Bill Williams Awesome Oscillator can give you an idea as to whether or not momentum will continue.
This is a trend-following indicator, so it is not something to be used in a short-term range bound market.
The indicator itself was built by Bill Williams, as we’re sure you have guessed, and has been around for some years. When using the Bill Williams Awesome Oscillator, you should think of it more or less as a tertiary signal, as support and price action should dictate what you do first.
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