Awesome Oscillator
The Awesome Oscillator measures momentum via fast-vs-slow median-price averages: green bars = momentum building, red = fading — saucers, twin peaks and zero crosses are its three classic signals.
What it is
The Awesome Oscillator (AO), created by Bill Williams: AO = SMA(Median Price, 5) − SMA(Median Price, 34), where Median Price = (High+Low)÷2. It gauges the gap between the 5- and 34-period midpoints — positive and widening means the short-term center is being lifted fast (accelerating momentum). AO renders as a red/green histogram under Williams's rule: a bar taller than the previous = green, shorter = red — regardless of sign. Green/red expresses the rate of change of momentum, not direction.
Origin
AO also comes from Bill Williams's chaos framework ("Trading Chaos", 1995), paired with the Alligator and Fractals. It answers "how healthy is the trend's momentum": an Alligator mouth-open confirmed by same-direction AO = a healthy trend in-system. The 34-period window follows the framework's parameter philosophy. MT5 ships it as iAO, a sub-window histogram.
Download Camovia Tray free — check quotes, manage positions, and hide in one click from your system tray.
Download FreeThe formula
One line of math:
Differences from MACD/OsMA: it uses median prices, plain SMAs, and a bar-to-bar coloring rule rather than sign — the same positive bar can be green (taller) or red (shorter). This is the most misread part of AO's chart language.
Worked example
A scenario separating color from sign:
- AO bars positive and each taller than the last (green): the short-term center keeps rising relative to the long-term one — accelerating bull momentum, the strongest phase.
- AO bars still positive but each shorter (red): the gap narrows — bull momentum decelerating (the trend may continue, but the car is slowing).
- AO flips negative: the 5-period center drops below the 34-period one — momentum turns bearish.
Sign = where the fast line sits relative to the slow (direction layer); color = bar-by-bar growth (speed layer). AO expresses direction and speed separately — all three Williams signals are built on these two layers.
How to read it
Reading AO (direction + speed layers):
| Range | Common interpretation |
|---|---|
| Positive territory | Bullish momentum dominant |
| Negative territory | Bearish momentum dominant |
| Green streak | Momentum building bar by bar — regardless of sign |
| Red streak | Momentum fading bar by bar — regardless of sign |
| Zero line | The 5/34 balance — a cross is a momentum direction switch |
The three classic signals (Williams's originals): (1) Saucer — above zero, three bars in a red-red-green shallow bowl; (2) Twin Peaks — below zero, two troughs with the second shallower, recovery failing to reach zero (buildup); (3) Zero cross — negative to positive or the reverse. All require Alligator-direction agreement in-system.
Common signals & usage
Saucer
Above zero, three consecutive bars in a red-red-green shallow bowl that never touches zero — a continuation signal; Williams's trend-add trigger.
Twin Peaks
Below zero, two troughs with the second shallower and the recovery failing at zero — bearish-momentum exhaustion structure (entry on the fractal breakout).
Zero-line cross
AO crossing 0 — the 5/34 centers trade places; noisy alone, needs a trend filter.
Divergence
Price new highs while AO peaks decline — wave-by-wave momentum decay; structurally like MACD divergence but on median prices.
Limitations & common mistakes
- Green is not bullish: green only means "taller than the previous bar" (a green bar in negative territory = bearish momentum fading) — reading green as a buy is AO's most common mistake.
- The 34-period lag: the long window makes AO slow to V-reversals — a trend-momentum tool, not a turn detector.
- High similarity to MACD: both are fast-slow gaps — but median prices + SMA + the coloring rule all differ; values and readings are not interchangeable.
- Zero-line tangles in ranges: chop whipsaws AO across zero — all three signals fail (back to the sleeping-alligator discipline).
- Framework dependence: Williams's original signals all require Alligator confirmation — using AO alone dismantles the system.
AO in MT5
AO is a built-in MT5 Bill Williams indicator (sub-window histogram). The MQL5 function for programmatic use is iAO:
| MQL5 function | iAO() (no parameters — 5/34 fixed) |
| Algorithm | SMA(Median, 5) − SMA(Median, 34) |
| Buffers | 0=main buffer (AO value) |
| Coloring rule | Bar-to-bar comparison (taller=green, shorter=red) — the MQL5 buffer carries values only; coloring is rendering |
| Display window | Sub-window histogram (zero line) |
iAO takes no parameters (Williams's 5/34 is locked). The buffer returns values — to reproduce the green/red coloring in code, compare each bar with its predecessor. Coloring affects rendering only, not the numeric logic.
Behavior across timeframes
15-minute
Zero-line tangles are frequent — take saucers/crosses only in the Alligator's direction
1-hour / 4-hour
The main swing-momentum monitor; saucers and twin peaks are clearest here
Daily
The framework's native habitat: the three signals are most representative on dailies
Weekly
A weekly zero cross is a quarter-scale momentum switch — a coarse long-term allocation signal
Indicator combinations
The standard in-system pairings for AO:
- With Alligator: the mouth-open sets direction, AO saucers/crosses confirm momentum — the framework's core combo. ALLIGATOR
- With Fractals: an AO twin peak + the fractal breakout — the complete original trigger for the twin-peaks entry. FRACTALS
- With MACD: both are fast-slow gaps — cross-validate the structures (median SMA vs close EMA); joint divergences are the strongest. MACD
FAQ
Q Is a green AO bar a buy signal?
No. AO's coloring is bar-to-bar: green = taller than the previous bar (momentum building), red = shorter — independent of sign. A green bar in negative territory means bearish momentum fading (a rebound may brew), not a buy. Reading green as bullish is AO's most common misread.
Q How is AO different from MACD?
Similar structure (a fast-slow gap) but entirely different conventions: AO uses median prices (H+L)/2 with plain SMAs (5/34); MACD uses closes with EMAs (12/26) plus an SMA9 signal. The readings differ too: AO has colored bars and the Williams signal set (saucer/twin peaks), MACD uses crosses and divergences. Joint divergences are the most credible.
Q What are the full conditions for a saucer?
Williams's original: above zero (bullish saucer), three consecutive bars in a red-red-green shape where the first is the highest red bar of the current trend, the second is lower, and the third is still below the first — a shallow saucer. Declining volume helps. The bearish saucer mirrors it below zero.
Q How is the twin-peaks entry confirmed?
Below zero, two troughs with the second shallower (fading bearish momentum), the recovery between them failing at zero; then wait for the price to break the up fractal sitting between the two peaks — Williams's original twin-peaks entry uses the fractal breakout as the trigger.
Q How do I add AO in MT5?
Menu: Insert → Indicators → Bill Williams → Awesome Oscillator, or drag it from the Navigator onto a sub-window. No parameters (5/34 locked); the red/green coloring renders automatically — remember green means "taller", not "bullish".
Turn MT5 / MT4 into a Tray Tool
Check quotes, manage positions, and hide in one click.
Download Camovia TrayThis page is educational content about a technical indicator. It is not investment advice. Indicator signals can and do fail — always combine them with your own risk management.