AO, Stochastic and RSI Signals with ATR Trade Levels

Summary

This educational example combines the Awesome Oscillator (AO), a smoothed stochastic oscillator, and RSI to define contrarian entry conditions. It enters long when stochastic is below 20 and RSI below 30 while AO is rising; it enters short when stochastic is above 80 and RSI above 70 while AO is falling. ATR supplies a stop level beyond the signal bar’s low or high and a target one ATR from the close. The listed defaults include a 5/34 AO calculation, a 14-period stochastic input, a 10-period RSI, and a 14-period ATR.

The source includes Pine Script and describes an hourly backtest period using 15-minute base data, but it reports no returns, drawdowns, or other test outcomes. Its author explicitly frames the code as a learning exercise and cautions against using it directly for buy or sell decisions. The example does not explain position sizing, costs, slippage, or how concurrent signals and exits are handled, so the rules alone are not evidence of a viable trading system.

Key ideas

• Long entries require oversold stochastic and RSI readings together with a rising AO.
• Short entries require overbought oscillator readings together with a falling AO.
• ATR sets a stop beyond the signal bar and a target one ATR from the close.
• The code is presented as a Pine Script learning example rather than validated trading advice.
• Backtest dates are supplied, but no performance results are reported.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.