Let me introduce my . ( ) script.
This indicator plots the oscillator as a histogram where blue denotes
periods suited for buying and red . for selling. If the current value
of AO ( ) is above previous, the period is considered
suited for buying and the period is marked blue. If the AO value is not
above previous, the period is considered suited for selling and the
indicator marks it as red.
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.
//////////////////////////////////////////////////////////// // Copyright by HPotter v1.0 15/04/2014 // This indicator plots the oscillator as a histogram where blue denotes // periods suited for buying and red . for selling. If the current value // of AO (Awesome Oscillator) is above previous, the period is considered // suited for buying and the period is marked blue. If the AO value is not // above previous, the period is considered suited for selling and the // indicator marks it as red. //////////////////////////////////////////////////////////// study("Bill Williams. Awesome Oscillator (AC)") nLengthSlow = input(34, minval=1, title="Length Slow") nLengthFast = input(5, minval=1, title="Length Fast") xSMA1_hl2 = sma(hl2, nLengthFast) xSMA2_hl2 = sma(hl2, nLengthSlow) xSMA1_SMA2 = xSMA1_hl2 - xSMA2_hl2 xSMA_hl2 = sma(xSMA1_SMA2, nLengthFast) nRes = xSMA1_SMA2 - xSMA_hl2 cClr = nRes > nRes ? blue : red plot(nRes, style=histogram, linewidth=1, color=cClr)
USDT (TRC20): TH29EEXa19vfwZNYvxdUuMxoFY5QDYLcWG
Here is an image with a crudely hand drawn Signal Line. Signal line can be any of the common moving averages. Simple moving average will suffice, I prefer Linear Weighted Moving Average. The Signal period would be the difference between the short and long periods of AO. With the common default of AO being short 5 and long 35, difference of the two being 30, Signal period should be set to 15. Signal line assists the AO by differentiating what kind of slope change we are experiencing ...1) Top/Bottom of Major/Minor Trend 2.) Gaps = heavy price movement 3.) Divergence Thanks!