Awesome Oscillator with Relative Strength Index Combo Forex Strategy

 

Awesome Oscillator with Relative Strength Index Combo Forex Strategy There is many types of traders in the forex market. E.g. Position Trader, Breakout
Trader, Pullback Trader, Swing Trader, Momentum Trader, and Novish Trader
etc.

If you are Momentum Trader this Awesome Oscillator with Relative Strength
Index (RSI) Combo Forex Strategy is for you. It will help you to catch and ride
Momentum properly.

Before exploring this Awesome Oscillator with Relative Strength Index (RSI)
Combo Forex Strategy at first we have to know details of Awesome Oscillator
and Relative Strength Index (RSI)

What is an Awesome Oscillator?

Bill Williams developed an Awesome Oscillator.

Awesome Oscillator usage was to measure the momentum in the Forex
market (or any market) by using a combination of:

34 period simple moving average of the median of the previous 34
candlesticks

5 period simple moving average of the median of the previous 5 candlesticks

Zero lines plus histogram

Calculation:

Awesome Oscillator is a 34-period simple moving average, plotted through
the central points of the bars (H+L)/2, and subtracted from the 5-period
simple moving average graphed across the central points of the bars
(H+L)/2.

MEDIAN PRICE = (HIGH + LOW) / 2
AO = SMA (MEDIAN PRICE, 5) – SMA (MEDIAN PRICE, 34)

 

Where:

MEDIAN PRICE — median price;
HIGH — the highest price of the bar;
LOW — the lowest price of the bar;
SMA — Simple Moving Average.

Awesome Oscillator with Relative Strength Index Combo Forex Strategy

 

 

Identify Trend with Awesome Oscillator:

Uptrend: When Awesome Oscillator is above the zero line that means its
uptrend because as per Awesome Oscillator calculation Median Simple
Moving Average (SMA) 5 crossed Median Simple Moving Average (SMA) 34
from below.

Downtrend: When Awesome Oscillator is below the zero line that means its
downtrend because as per Awesome Oscillator calculation Median Simple
Moving Average (SMA) 5 crossed Median Simple Moving Average (SMA) 34
from above.

When the histogram is rising green, we can determine that the Awesome
Oscillator value of this candlestick if higher than the previous

When the histogram is falling red, the value of the Awesome Oscillator is less
then the previous candlestick

Twin Peak: When Awesome Oscillator is shown divergence then its call twin
peak.

What is the Relative Strenght Index (RSI)?

Relative Strength Index (RSI) developed by J. Welles Wilder. It’s also a momentum
indicator. You can easily catch and ride momentum via Relative Strength Index
(RSI).

RSI oscillates between zero and 100.

According to Wilder, RSI is considered overbought when above 70 and oversold
when below 30.

 

Signals can also be generated by looking for divergences, failure swings and
centerline crossovers. RSI can also be used to identify the general trend.

 

Calculation of Relative Strength Index (RSI):

100
RSI = 100 – ——–
1 + RS

 

RS = Average Gain / Average Loss

The very first calculations for average gain and average loss are simple 14-period
averages:
 First Average Gain = Sum of Gains over the past 14 periods / 14.
 First Average Loss = Sum of Losses over the past 14 periods / 14
The second, and subsequent, calculations are based on the prior averages and the
current gain loss:

 Average Gain = [(previous Average Gain) x 13 + current Gain] / 14.
 Average Loss = [(previous Average Loss) x 13 + current Loss] / 14.

Let’s explore Awesome Oscillator with Relative Strength Index (RSI) Combo
Forex Strategy

Image 1:

 

Awesome Oscillator with Relative Strength Index
(RSI) Combo Forex Strategy (BUY)

Image point number – 1, We see the price goes down massively. As per
Awesome Oscillator with Relative Strength Index (RSI) Combo Forex Strategy
(BUY) rules this time we have nothing to do only observe.

Image point number – 2, Awesome Oscillator shown consecutively RED. As
per Awesome Oscillator with Relative Strength Index (RSI) Combo Forex Strategy (BUY) rules this time we have nothing to do only observe. We need
more confirmation.

Image point number – 3, Relative Strength Index (RSI) is in oversold area.
But As per Awesome Oscillator with Relative Strenght Index (RSI) Combo
Forex Strategy (BUY) rules this time we have nothing to do only observe. We
need more confirmation.

Image point number – 4, Price created Lower Low. It’s s a chance to create
divergence if Awesome Oscillator will create Lower High. Lets CHECK…..

Image point number – 5, WOW……. Awesome Oscillator create Lower High.
Its DIVERGENCE. As per Awesome Oscillator with Relative Strength Index
(RSI) Combo Forex Strategy (BUY) rules this time we have to do if Awesome
Oscillator turned GREEN and Relative Strength Index (RSI) above oversold
area same time or within two candlesticks.

Image point number – 6, EXCELLENT…… Awesome Oscillator turned GREEN
and Relative Strength Index (RSI) above oversold area same time.
As per Awesome Oscillator with Relative Strength Index (RSI) Combo Forex
Strategy (BUY) rules, its BUY signal.

Image point number – 7, Aggressive or conservative trader put their BUY
STOP order 2 pips above Awesome Oscillator turned GREEN and Relative
Strength Index (RSI) above the oversold area candlesticks.

Image point number – 8, After hit BUY STOP order aggressive trader place
STOP LOSS 2 pips below of Awesome Oscillator turned GREEN and Relative
Strength Index (RSI) above the oversold area candlesticks.

Image point number – 9, Conservative traders place STOP LOSS 2 pips below
of Swing Low.

Image point number – 10, Conservative or aggressive trader place their take
profit level on near swing High or 1: 2 or 1 : 3 risk-reward ratio.

 

Image 2:

 

 

Awesome Oscillator with Relative Strenght Index (RSI)
Combo Forex Strategy (SELL)

Image point number – 1, We see price goes up massively. As per Awesome
Oscillator with Relative Strength Index (RSI) Combo Forex Strategy (SELL)
rules this time we have nothing to do only observe.

Image point number – 2, Awesome Oscillator shown consecutively GREEN.
As per Awesome Oscillator with Relative Strength Index (RSI) Combo Forex
Strategy (SELL) rules this time we have nothing to do only observe. We need
more confirmation.

Image point number – 3, Relative Strength Index (RSI) are in overbought
area. But As per Awesome Oscillator with Relative Strength Index (RSI)
Combo Forex Strategy (SELL) rules this time we have nothing to do only
observe. We need more confirmation.

Image point number – 4, Price created Higher High. It’s s a chance to create
divergence if Awesome Oscillator will create Higher Low. Let’s CHECK…..

Image point number – 5, WOW……. Awesome Oscillator creates Higher Low.
Its DIVERGENCE. As per Awesome Oscillator with Relative Strength Index
(RSI) Combo Forex Strategy (SELL) rules this time we have to do if Awesome
Oscillator turned RED and Relative Strength Index (RSI) below overbought
area same time or within two candlesticks.

Image point number – 6, EXCELLENT…… Awesome Oscillator turned RED
and Relative Strength Index (RSI) below overbought area same time.
As per Awesome Oscillator with Relative Strength Index (RSI) Combo Forex
Strategy (SELL) rules, its SELL signal.

Image point number – 7, Aggressive or conservative trader put their SELL
STOP order 2 pips above Awesome Oscillator turned RED and Relative
Strength Index (RSI) below overbought area candlesticks.

Image point number – 8, After hit SELL STOP order aggressive trader place
STOP LOSS 2 pips above of Awesome Oscillator turned RED and Relative
Strength Index (RSI) below the overbought area candlesticks.

Image point number – 9, Conservative traders place STOP LOSS 2 pips above
of Swing High.

Image point number – 10, Conservative or aggressive trader place their take
profit level on near swing Low or 1 : 2 or 1 : 3 risk-reward ratio.

 

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