Awesome Oscillator Strategy: Combining SMA and Awesome Oscillator


Awesome Oscillator strategy


Key Takeaways🔑

The Awesome Oscillator strategy combines the Simple Moving Average (SMA) and the Awesome Oscillator to identify potential trade opportunities.
Proper chart setup and indicator configuration are crucial for successful implementation of the strategy.
Practice the strategy on a demo account before applying it to real trades, and always be patient in waiting for the right signals.

We want to introduce you to the new Awesome Oscillator strategy. The strategies are often based on a few indicators. To apply a strategy successfully, a trader ought to get familiar with the indicators that are used in a particular strategy.

Then, he can decide whether it is a method well suited for him or maybe, he shall search further. So let’s talk about one of the strategies that combine two indicators, the SMA and Awesome Oscillator.

1-minute EURUSD chart with our awesome template
1-minute EURUSD chart with our awesome template

How to Prepare a Chart for Trading Awesome Oscillator Strategy

  1. Log into your IQ Option account.
  2. Select the financial instrument you want to trade.
  3. Set the chart type to Japanese candlesticks chart with a 1-minute candle period.
  4. Add the Moving Average indicator with a period of 100 and type SMA.
  5. Add the Awesome Oscillator indicator with default settings.
  6. Save the template for future use.
Use simple moving average with a period of 100
Use the simple moving average with a period of 100

 

Template for Awesome Oscillator strategy
You can save a template for Awesome Oscillator strategy

Implementing the Awesome Oscillator Strategy

Opening a Long Trade

  1. Wait for an uptrend.
  2. Look for the SMA to cut through the price bar.
  3. Check the Awesome Oscillator histogram for a green bar.
  4. If confirmed, open a 5-minute long position.
Signal to open a 5-minute up trade
Signal to open 5-minute up trade

Opening a Short Trade

  1. Wait for a downtrend.
  2. Look for the SMA to cross the price bar.
  3. Check the Awesome Oscillator histogram for a red bar.
  4. If confirmed, open a 5-minute short position with a 1-minute chart time frame.
Signal to open a 5-minute down trade
Signal to open 5-minute down trade

Pros and Cons of the Awesome Oscillator Strategy

👍 Pros 👎 Cons
Easy to understand and implement. Requires patience to wait for the right signals.
Combining two indicators increases the accuracy of the signals. Not suitable for traders who prefer quick decision-making.
Can be applied to various financial instruments. Might not work well in all market conditions.


Comparison: Simple Moving Average (SMA) vs. Awesome Oscillator (AO)

Simple Moving Average (SMA) Awesome Oscillator (AO)
Averages the closing prices of a set number of periods. Compares the difference between a short-term moving average and a long-term moving average.
Helps identify trends and reversals. Helps identify potential trend reversals and momentum shifts.
Lags behind the current price due to averaging. Less lagging compared to the SMA as it focuses on the midpoint of the price range.
Can be used as a standalone indicator. Often used in combination with other indicators for better signal confirmation.

Conclusion

The Awesome Oscillator strategy, which combines the SMA and the Awesome Oscillator, is a useful tool for identifying potential trade opportunities. It’s crucial to practice using the strategy and develop patience in waiting for the right signals from both indicators.

Utilize the IQ Option platform’s demo account to gain experience and confidence in applying the strategy in real trading situations. Remember that no strategy is foolproof, and it’s essential to manage your risk and continually refine your trading skills.

😃 We wish you success! 😃

Frequently Asked Questions

  • What is the main difference between the SMA and the Awesome Oscillator?
    The SMA averages the closing prices of a set number of periods, while the Awesome Oscillator compares the difference between a short-term moving average and a long-term moving average.
  • Can I use the Awesome Oscillator with other indicators?
    Yes, you can combine the Awesome Oscillator with other indicators such as RSI, Stochastic, or MACD for improved signal accuracy.
  • Is the Awesome Oscillator strategy suitable for all financial instruments?
    The Awesome Oscillator strategy can be applied to various financial instruments, including Forex, stocks, indices, and commodities. However, always test the strategy on a specific instrument before using it in real trades.
  • How can I increase my chances of success with the Awesome Oscillator strategy?
    Practice using the strategy on a demo account, wait for confirmation from both the SMA and the Awesome Oscillator before entering a trade, and continually refine your trading skills.
  • Can I use the Awesome Oscillator strategy with different timeframes?
    Yes, you can use the Awesome Oscillator strategy with different timeframes, but you may need to adjust the settings of Yes, you can use the Awesome Oscillator strategy with different timeframes, but you may need to adjust the settings of””
    the indicators accordingly to better suit the chosen timeframe. Always test the strategy on the desired timeframe using a demo account before implementing it in real trades.

GENERAL RISK WARNING

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Kindly note that this article does not provide any investment advice. The information presented regarding past events or potential future developments is solely an opinion and cannot be guaranteed as factual, including the provided examples. We caution readers accordingly.

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Bart Bregman

Author / IQ Option expert: "My name is Bart Bregman, I have 9 years of full-time professional trading experience. I've been trading with IQ Option for more than 7 years, mainly on the shorter time frames doing technical analyses, and have many experience with Binary Options, CFDs, Options, and Crypto trading. There is no such thing as a bad trade! As a digital nomad trader, I'm mostly traveling all over the world. Follow my journey on Instagram at https://www.instagram.com/bart_bregman/. "

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