An Accelerator Oscillator is a technical analysis tool used by traders to spot the early trends and reversals of the security.
This indicator was developed by Bill Williams. It is developed to measure the acceleration or deceleration of the security price.
In this blog, I will try my best to explain you the complete concept of an Accelerator Oscillator on Pocket Option plus how you can use them effectively.
What is an Accelerator Oscillator?
Accelerator Oscillator = 5 (AO) – 34 (34)
As I said above, the Accelerator Oscillator is a technical analysis tool that was developed by Bill Williams.
Bill Williams has created multiple Masterpiece indicators and one of them is Accelerator Oscillator is one of them.
This indicator aims to find the upcoming price movements of security using a series of histogram lines that oscillate around the midline also known as the zero line.
Using the histogram lines you can identify the upcoming trends where the increase in green spikes it signals a bullish trend and vice versa with an increase in red spikes signalling a bearish trend.
Talking about the zero line or mid line, It helps us to analyse the strength of the trend with the spikes below or above the same signals a strong trend and vice versa, with small spikes below or above the zero line signals a tweaking of a trend.
Components
The Accelerator Oscillator is made from the two most important components
Awesome Oscillator: The Awesome oscillator is one of the most important components of the indicator. The Awesome Oscillator is derived after calculating the difference between the Awesome oscillator and 5-period SMA.
Acceleration Deceleration: The Acceleration Deceleration represents a Momentum shift in the market made from a five-period SMA. It is designed to identify the ships in momentum before they can manifest the price changes that bring a trader a valuable advantage against the potential trend reversal.
How to add an Accelerator Oscillator on Pocket Option?
To add Accelerator Oscillator on the Pocket Option trading platform follow the steps given below:
1> Login to your Pocket Option account. In case, you don’t have one don’t have click here.
2> First, select the desired currency you want to trade from the top of the page.
3> Second, set your default chart to candlestick.
4> Next, click on the indicator button at the top of the page.
5> Search for the Accelerator Oscillator in the indicator list and click the name.
6> Lastly, make necessary amendments and once you are done click apply.
How to Place Trades with Accelerator Oscillator?
Finding trends and placing trades using an Accelerator Oscillator is very easy before we can discuss how you can do the same let’s first understand the use of the histogram line and zero line.
Histogram line: The Histogram line is the most important component of the indicator using the histogram line you can identify the upcoming trends and reversals. with the green bars domination, you can assume the buyer’s domination similarly, with red bars domination you can assume the sellers’ domination.
Zero line: The Zero line is another one of the most important components using the zero line you can identify the strength of the trend.
As, you can see above the green spikes above the zero line it signal a bullish trend and you can use this opportunity to place a buy trade and vice versa, the red bars’ domination below the zero line signals a bearish trend and you can use this opportunity to place a sell trade.
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