Detecting Awesome Oscillator Divergences for Trading Signals

Summary

This indicator description explains how to mark regular and hidden divergences between price swings and the Awesome Oscillator histogram. It assigns different line styles and colors to bullish and bearish divergence types, and can display directional arrows as signals. For a bullish regular divergence example, the oscillator forms a shallower low while price makes a deeper low, with the oscillator remaining below zero. The indicator also offers alert and notification options.

Two settings shape which divergences are drawn: a tolerance for how far oscillator values may fall outside the expected range, and whether connecting lines may cross the histogram body. The document illustrates the settings with screenshots but provides no quantified comparison, trade rules, backtest, or evidence that the arrows predict profitable trades. Divergence is therefore presented as a charting signal whose practical value and parameter sensitivity are left untested in the description.

Key ideas

• The indicator identifies regular and hidden bullish and bearish divergences between price and the Awesome Oscillator.\nA bullish regular divergence pairs a lower price low with a shallower oscillator low below zero.\nA deviation setting controls the allowed tolerance for oscillator values.\nA separate option determines whether divergence lines may cross the histogram body.\nThe description offers no performance test or trading outcomes.

Tags

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