loxx

PDFMA Awesome Oscillator [Loxx]

Theory:

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

This version uses PdfMA (Probability Density Function weighted Moving Average ) instead of SMA ( Simple Moving Average ). This is a deviation from the original AO since in the AO since there is no parameter that you can change, but with this version, you can change the variance part of the PdfMA calculation. That way you can get different values for the AO even without changing periods of calculation (the general rule of thumb is: the greater the variance, the smoother the result)

Usage:

You can use color changes (mainly on zero cross) for trend change signals

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

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