|Welcome to currency trading with Profiforex!
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|The Acceleration/Deceleration Oscillator measures the acceleration and deceleration of the current momentum. It represents the third market dimension.|
Let's assume that a ball is rolling down the street.
Using the Awesome Oscillator that was talked about in the previous video, we can define its momentum.If the road goes uphill, the ball will start to slow down (it will decelerate).Although the Awesome Oscillator will continue to identify the momentum correctly, the ball will soon stop.
|In order for the trader to be prepared for this moment, Bill Williams suggests using the Acceleration/Deceleration Oscillator to measure this acceleration.Before the price behavior changes, the momentum changes. Even before the momentum, we see the change in acceleration.That's why the Acceleration/Deceleration Oscillator is an important component in successful trading.|
A buy signal above the zero line of the indicator is generated
when there are two consecutive green histogram bars whose highs are higher than the preceding bar's high.
A sell signal below the zero line of the indicator is generated
when there are two consecutive red histogram bars whose lows are lower than the preceeding bar’s low.
|If the histogram is below the zero line, a buy signal below the zero line of the indicator is generated when there are three consecutive green histogram bars with the lows higher than the preceeding bar’s low.|
|If the histogram is above the zero line, a sell signal above the zero line of the indicator is generated when there are three red consecutive histogram bars whose highs are lower than the preeceding bar’s high|