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Awesome Oscillator Technical Indicator (AO) is a 34-period simple moving average, plotted through the middle points of the bars (H+L)/2, which is subtracted from the 5-period simple moving average, built across the central points of the bars (H+L)/2. It shows us quite clearly what’s happening to the market driving force at the present moment.

AO signals to buy:

* "Saucer" is the signal to buy which appears when the direction changes from the downward to upward with the second column is lower than the first one and is colored red and the third column is higher than the second and is colored green. It is generated when the bar chart is higher than the nought line.

* "Nought line crossing" is a signal to buy which appears when the bar chart passes from the negative values to that of positive. Two columns are necessary for it: one of them has to be below the nought line while another has to cross it.

* "Two tops" signal is generated when the bar chart values are below the nought line and when a top pointing down is followed by another one which is higher thus closer to the nought line. If the bar chart crosses the nought line in the area between the tops, the signal to buy is not generated. If an additional higher top is formed and the bar chart has not crossed the nought line, an additional signal to buy will appear.

Calculation:

Awesome Oscillator bar graph is a difference between 5-periods simple moving average, built on central points of the bar (H+L)/2 and 34-periods simple moving average built on central points of the bar (H+L)/2.
MEDIAN PRICE = (HIGH + LOW) / 2 AO = SMA (MEDIAN PRICE, 5) - SMA (MEDIAN PRICE, 34)

Where:

MEDIAN PRICE - median price;
HIGH - maximum bar price;
LOW - minimum bar price;
SMA - simple moving average.

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After AC lets talk about Accumlation/Distribution(AD). The more expanded the volume of trade is the more noticeable the price changes will be. Accumulation/Distribution Technical Indicator is determined by the changes in price and volume. This indicator is a less commonly used variant of the indicator On Balance Volume. When the Accumulation/Distribution indicator grows, it means accumulation of a currency, as the overwhelming share of the sales volume is related to an upward price movement. When the indicator drops, it means distribution (or selling) of the currency, as most of sales take place during the downward price trend.

Divergences between the A/D indicator and the currency price indicate the upcoming change of prices. As a rule, in this case, the price tendency moves in the direction in which the indicator moves. For instance, if the indicator is growing, and the price of the security is falling, a soon turnaround of price is expected.














Calculation:

* Description: Accumulation Distribution (AD) is a comparison of the price movement and the current range, with the result being used to weight the current volume.
* Calculation:
AD = ((Close - Open) / (High - Low)) * Volume

Trading Use:

Accumulation Distribution is usually used as a divergence indicator, with long entries signaled by bullish divergence, and short entries signaled by bearish divergence. Accumulation Distribution can also be used as an exit indicator, by showing the end (or the weakening) of the current trend.

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Accelerator/Decelerator (AC) is an oscillator that measures activation or deactivation of the driving force on the market. It changes its direction before any changes in the direction of the price take place. This oscillator has much in common with Awesome Oscillator, but unlike AO, the crossing of the zero line is not a buy/sell signal.

Accelerator/Decelerator is mostly used to predict the change of the driving force on the market. When AC is at the zero line it means that the driving force is at balance with the acceleration. When AC crosses the zero line and goes up or down the only thing that should be traced is the change of the color of the bars.

Interpretation:

The nought line is basically the spot where the driving force is at balance with the acceleration. If Acceleration/Deceleration is higher than nought, then it is usually easier for the acceleration to continue the upward movement (and vice versa in cases when it is below nought). Unlike in case with Awesome Oscillator, it is not regarded as a signal when the nought line is crossed. The only thing that needs to be done to control the market and make decisions is to watch for changes in color. To save yourself serious reflections, you must remember: you can not buy with the help of the Accelerator Decelerator Oscillator, when the current column is colored red, and you can not sell, when the current column is colored green.

Methods of use:

1. When the chart is above the zero line and there are two green bars, it is a signal to buy.
2. When the chart is below the zero line and there are two red bars, it is a signal to sell.

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Now we going to discuss that how we can use moving average to out advantage. As we already aware moving average is a lagging forex indicator which means that it is slow and it can only tell you what had just happened instead of telling you where the price is likely to move. However, by utilizing this lagging forex indicator together with repetitive price patterns, you can then form a reliable forex trading system to use.

If you have been seen a forex chart, you will notice that the price is constantly fluctuating up and down making it tough for you to visualize price action. What moving average does for you is to give you a visualizing line that can allow you to see the price movement.

Other than using the gradient of the moving average as a trend indicating tool, you can also make use of this forex indicator to place your trade. One of my favourite method of using moving average is the crossover.

This is what you need to do with this forex indicator:

Step 1: Set up a long term EMA (50 EMA)

Step 2: Set up a short term EMA (20 EMA)

Step 3: Observe the crossover of these two lines

If the short term moving average is above the long term moving average, this is known as the golden cross and it usually indicates that the trend is moving up. If the short term moving average is below the long term moving average, this is know as the death cross and it usually indicates that the trend is moving down.

This does not means that you should trade every crossover as it can be very devastating to your account. What you need to do is to make use of trend line or trend wall to help you place your trade. Remember this, you should only trade when there is a trend line break. If you are looking for forex indicator to use for your trading, you must add moving average to your toolbox.