What is Accelerator Oscillator?
The Accelerator Oscillator measures the change in momentum rather than momentum itself. It takes the Awesome Oscillator, which compares a 5-bar and a 34-bar average of the bar midpoint, and subtracts that oscillator's own 5-bar average. The result is drawn as columns around zero in a separate pane, and it tends to turn before the Awesome Oscillator does.
The Accelerator Oscillator shows whether momentum is gathering or fading. It does not measure trend direction on its own, it has no overbought or oversold levels, and it does not use volume.
How to use Accelerator Oscillator
- Column colour. A column taller than the one before it is drawn in the stronger colour, a shorter one in the paler colour. Above zero that is dark teal for rising and pale teal for falling; below zero it is pale red for rising and bright red for falling.
- Above or below zero. Above zero, the Awesome Oscillator sits above its recent average, so momentum is accelerating upwards. Below zero, it is accelerating downwards or slowing.
- Runs of the same colour. Several rising columns in a row mean upward acceleration is building, even if the columns are still below zero. Several falling columns mean the opposite.
- Turns ahead of the trend. Because it measures a change in momentum, the oscillator usually turns before momentum itself and before price does. That makes it early, and also prone to turning on moves that never follow through.
These are ways to read the columns, not entry signals on their own.
Settings
This indicator has no adjustable inputs. The lengths are fixed: 5 and 34 bars for the Awesome Oscillator, and 5 bars for its average.
Calculation
The Accelerator Oscillator starts from the Awesome Oscillator (AO), built on the bar midpoint, hl2 = (high + low) / 2, with simple moving averages:
AO = SMA(hl2, 5) - SMA(hl2, 34)
AC = AO - SMA(AO, 5)The Awesome Oscillator needs 34 bars before it has a value, and its 5-bar average needs five of those values, so the first column appears on about the 38th loaded bar.
Each column is compared with the previous one to pick its colour. The very first column has nothing to compare with and is drawn in the falling colour for its side of zero. No other levels are drawn; the columns sit around zero.
Limitations
- It is early, so it is often wrong. A change in acceleration happens long before a change in trend, and many of them never become one.
- It is noisy in ranges. In a sideways market the columns flip colour and cross zero repeatedly.
- The lengths are fixed. There is no input to slow it down or speed it up for a different timeframe.
- The live candle moves. The current column and its colour change until that bar closes.
- It is not a strategy. On its own it carries no risk management, sizing or exit.
Frequently asked questions
The Accelerator Oscillator is the Awesome Oscillator minus its own 5-bar simple average. It measures whether momentum is speeding up or slowing down, and shows it as coloured columns around a zero line.
The colour says whether the column is higher or lower than the one before it, and the shade says which side of zero it is on. Dark teal is a rising column above zero, pale teal a falling column above zero, pale red a rising column below zero and bright red a falling column below zero. A run of rising columns means momentum is accelerating upwards.
No. The indicator declares no inputs. Its lengths are fixed at 5 and 34 bars for the Awesome Oscillator and 5 bars for the average that is subtracted from it.
No. Each column is calculated from the bars up to and including its own, and closed columns are not revised. The current column and its colour move while that candle is live and settle when it closes.
The Awesome Oscillator measures momentum as the gap between a fast and a slow average of the bar midpoint. The Accelerator Oscillator measures how that momentum is changing, by comparing it with its own recent average. As a result it turns sooner and gives more signals, including more false ones.
Use the Add to chart button at the top of this page. It opens BTC/USDT on Binance in the Altrady Charts terminal with the built-in Accelerator Oscillator already applied. On any other market, open the indicator picker on the chart and choose Accelerator Oscillator from the Momentum group.