Awesome Oscillator (AO) on a Live Gold Chart

What it shows

Its own pane shows columns rising from a zero line when the quick average is above the slow one and hanging down when it is below. A bar is green when it is higher than the one before it and red otherwise, wherever it sits.

How Pravex works it out

1. For each candle, take the midpoint: (high + low) ÷ 2, called hl2.
2. Work out the simple average of the midpoint over the last 5 candles and over the last 34 candles.
3. AO = the 5-candle average − the 34-candle average.
4. Colour each bar by comparing it with the previous one: one colour when it is higher, the other when it is equal or lower.

Settings

Setting	Default	What changing it does

How traders read it

The zero line separates the two states. Above it, recent midpoints are higher than the 34-candle norm. Below it, lower. A cross through zero means the quick average has just passed the slow one.

The colour tells you about the change from bar to bar. A run of bars getting taller above zero is the quick average pulling away; the first shorter bar after a tall run says that pull has paused.

The shape of the bars carries a hint too. Two peaks above zero with the second lower than the first, while price made a higher high, is a common sign the push is thinning.

When it misleads

The lengths 5 and 34 are fixed in Pravex, so the indicator cannot be tuned for a slower or quicker market; you change the chart timeframe instead. The bars are the gap in price units, so their height on gold and on another instrument cannot be compared. In a sideways market the bars flip around zero and the colour changes with every wiggle.

Questions and answers

Can I change the Awesome Oscillator settings?

No. It has no inputs in Pravex: the lengths are fixed at 5 and 34, and the price is always the midpoint of the high and low. To see a slower or quicker version, switch the chart timeframe.

Why is an Awesome Oscillator bar red above zero?

Red only means the bar is equal to or lower than the bar before it. Above zero, a red bar says the quick average is still on top but the gap has stopped growing. Green means the bar is higher than the last one.

What does it mean when the bars cross zero?

The 5-candle average of midpoints has moved from one side of the 34-candle average to the other. It describes what has already happened over those candles.

What is the saucer signal?

A name for a short pattern above zero: two falling bars, then a rising one, while all three stay above the line. It reads as a pause in the quick average’s lead that has just ended. The mirror shape below zero is the bearish version. It is a reading habit; Pravex does not mark it.

Related: Moving Average Convergence Divergence, Momentum, Ultimate Oscillator, Williams Alligator, every indicator.