Accelerator Oscillator

Acceleration/Deceleration Technical Indicator (AC)

The AC indicator measures the acceleration and deceleration of the current driving force. It provides early warnings of changes in the driving force before they affect the price.

Understanding the Nought Line

The nought line represents the balance point between the driving force and acceleration. When the AC indicator is above the nought line, it indicates that the acceleration is favoring upward movement. Conversely, when it is below the nought line, it suggests a preference for downward movement.

Interpreting Color Changes

The color of the AC indicator columns is crucial for making trading decisions. A red column indicates that buying is not recommended, while a green column suggests that selling is not advisable.

Entering the Market

To enter the market in the direction of the driving force, look for two consecutive green columns to buy or two consecutive red columns to sell. If the driving force is against your intended position, you’ll need an additional column for confirmation.

Green columns are higher than the previous column, red columns are lower. AC changes direction before the Awesome Oscillator.

Calculation of Accelerator Oscillator

The AC bar chart is the difference between the 5/34 driving force bar chart (the Awesome Oscillator) and a 5-period simple moving average of that bar chart:

AO = SMA(MEDIAN PRICE, 5) - SMA(MEDIAN PRICE, 34)
AC = AO - SMA(AO, 5)

Where:

MEDIAN PRICE is (HIGH + LOW) / 2 of each bar;
SMA is a simple moving average;
AO is the Awesome Oscillator.

A column is green when its value is higher than the previous column, and red when it is lower.