Accelerator Oscillator

Accelerator Oscillator

Accelerator Oscillator

We are continuing our analysis of Bill Williams indicators, and this time our topic is the so-called Accelerator Oscillator. This interesting tool can help you examine the forces that are influencing a price, which means that you can predict when the price will change its direction. It’s an early warning system of sorts because the market driving force always changes before the price and thus creates a window of opportunity you can use to your advantage. We will show you how to find that window and make the most of it, but please be aware that some previous knowledge is required to master this tool. If you think you’re up to the challenge, read on!

Accelerator Oscillator | Principles

Like we said earlier, Accelerator Oscillator is also one of Bill Williams Indicators, but the principle according to which it operates is specific. The oscillator is plotted below your chart and shows red and green bars denoting the market force. This force is what changes the price, but in order for the price to change the force has to stop accelerating and start decelerating (if the price was going up)or vice versa (if the price was going down). Red bars show decelerations, green ones acceleration. Keep in mind that the price will start changing only when the force starts gaining speed in the opposite direction. Given that Accelerator Oscillator helps you predict these changes in the force, you can see why it is so popular. Stay with us, we will show you how to use it in the next paragraph.

Accelerator Oscillator | The way it works

Unlike the Awesome Oscillator, the zero level is not that important here. It merely represents equilibrium. To properly use the Accelerator Oscillator, however, you need to focus on the colors – buy when the last bar is green and sell when it’s red. Do keep in mind that it matters how the force is influencing the price when you enter the market. If you’re entering in the same direction, two same bars should be enough of an indicator for you to react. If the force is acting opposite to your position, then another bar should be taken into consideration. And that’s the main thing you have to worry about! That’s why experienced traders love this tool and beginners find it so easy to use.

Accelerator Oscillator | Conclusion

As you can see, the interesting idea behind the Accelerator Oscillator can help you a lot with predicting your price’s movements. It can provide you with valuable time to react even before the price starts moving, which keeps you one step ahead of all other traders. Of course, you can always use another tool to confirm what this oscillator is telling you, and we have analyzed loads of them on this website. Feel free to browse around and find what suits you because you can never have too much data to work with if you’re a trader.


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Author: Ben Prescott

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