Awesome Oscillator Directional Color and Reversal Strategy

Summary

The script calculates the Awesome Oscillator as the difference between fast and slow simple moving averages of the bar midpoint, using periods of 5 and 34 by default. It colors the histogram according to whether the oscillator is rising or falling, then enters long positions when it rises and short positions when it falls. A setting can reverse those directions; unchanged readings retain the previous position.

The document provides an indicator-based rule and implementation, but no reported backtest results, market, timeframe, or performance measures. Its promotional comments about the source book do not establish evidence for the strategy. The script itself advises using the approach for learning or paper trading. Practical evaluation would need to account for transaction costs, test across instruments and periods, and assess risk; none of that analysis is supplied here.

Key ideas

• The oscillator is the difference between fast and slow moving averages of the bar midpoint.
• A rising oscillator triggers a long position, while a falling oscillator triggers a short position.
• The reverse setting swaps the long and short signals.
• The document gives no performance evidence, and its script recommends educational or paper use.

Tags

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