Acceleration / Deceleration Oscillator
(AC)
Acceleration / Deceleration Oscillator is an indicator of changes / deceleration rates. It was developed by Bill Williams.
The author believes that the AC LED is capable to predict price movements. This assumption is based on a possible slowdown in the rate of growth / decline rates before the change of direction for its further movement. This means that AC changes direction before changing direction of the driving force which changes its direction before the price.
The terminal MT4 chart is displayed in the AC histogram. Periods of growth are drawn in green histogram bars, and periods of decline - the red.
Recommended settings for Williams Bmllom indicator Acceleration / Deceleration is 5 and 34, but to play the forex they are not very suitable. Therefore, the parameters should be selected on an individual basis to use the period of time and currency pair.
AU is calculated as the difference between the Awesome Oscillator and 5-period averaging Awesome Oscillator:
MEDIAN PRICE = (HIGH + LOW) / 2
AO = SMA (MEDIAN PRICE, 5) - SMA (MEDIAN PRICE, 34)
AC = AO - SMA (AO, 5)
Where:
MEDIAN PRICE - the median price;
HIGH - the highest price of the bar;
LOW - the lowest price of the bar;
SMA - Simple Moving Average;
AO - an indicator Awesome Oscillator.
Use of Acceleration / Deceleration:
1.Order purchase should be put in case the value of the histogram display is in positive territory (above zero), and the last two columns of its consistently higher than the last column of the fall. BuyStop order in this case is exposed to a tick above the high of the candle, which corresponded to the signal bar.
For placing orders SellStop should apply the above described signal in mirror image.
2.When finding the indicator below the zero line, a signal to buy is the emergence of three successive columns of the histogram, which would have greater height than the last column with the lowest value. As in the first case, a warrant for the purchase is higher by 1 pip of the maximum signal candle.
For placing orders SellStop should apply the above described signal in mirror image.
