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The Awesome Modified Oscillator, which is also known as Awesome Mod, is an updated and improved version of the standard Forex indicator. Due to the modification of the previous version, namely the use of calculations of two different-period Awesome Oscillator indicators at once, as well as the use of three exponential moving averages in calculations, its new version is more efficient and accurate in its signals. The indicator is presented in the lower window of the price chart as two AO histograms, one of which has a longer period than the other. Thus, taking into account the readings of both histograms, it can be easily determined the current trend and opened trade in its direction.
The Awesome Modified Oscillator works effectively on absolutely all timeframes using any convenient currency pairs.
Input parameters
The Awesome Modified Oscillator indicator in its settings has six input parameters that refer to the two indicators included in its composition. Also in its settings there are parameters that are responsible for the overall visualization of the indicator, namely for its color gamut and width, and in the Levels section additional signal levels can be added, the intersection of which by the histogram can be considered as a certain signal.
- Fast EMA Period - the period of the fast moving average included in the indicator. The default value is 18.
- Medium EMA Period - parameter of the period of the average exponential moving average. The default value is 40.
- Slow EMA Period - parameter responsible for the value of the slow moving average. The default value is 200.
- AO Fast MA Period - the period of the fast moving average of the AO indicator. The default value is 12.
- AO Slow MA Period - slow moving AO period. Default value is 18.
- Applied Price - parameter responsible for the type of price to which the indicator calculations will be applied. The default value is Close price.
Indicator signals
The algorithm of the Awesome Modified Oscillator is very simple, since it works on the principle of all histogram indicators. The main thing when trading with it is to take into account the location of two histograms relative to each other and their level 0, as well as their colors. If the conditions of both coincide on a certain candle histograms, then, taking into account the current position, any trade can be opened. But it should be borne in mind that if the signals of two histograms diverge, for example, the signal of one of them indicates an uptrend, and the second indicates a downtrend, trades should not be opened at all, and all current ones should be closed immediately.
Signal for Buy trades:
- The AO indicator with a fast period is above the slow AO, while they are both above the 0 level.
- Both indicators must have a color with a growth value.
After the appearance of such conditions on a certain candle, a long position can be opened. It should be closed after one of the indicators turns into the opposite color, as this can be considered as a signal of the end or weakening of the uptrend.
Signal for Sell trades:
- The slow period histogram rose above the fast period histogram, while both of them are below the 0 level.
- Both histograms must be color-coded with a fall value.
After receiving such conditions, a short position can be opened on the current candle, that is, a sell trade, which should be closed after at least one of the histograms acquires a different color. In this case, the current downward trend weakens or ends.
Conclusion
The Awesome Modified Oscillator is a very logical yet extremely easy to use indicator that is more accurate than the standard version. Even though the indicator has been slightly modified visually, its signals are still accurate. In order to get the right skills not only in using this indicator, but in trading in general, it is recommended to pay due attention to preliminary practice on a demo account.
