Monday, June 8, 2009
Accelerator Oscillator
The Accelerator Oscillator has green and red bars pointing upwards and downwards. What they do basically is measure the acceleration and deceleration of the momentum of the price.
There are 2 directions for the accelerator oscillator: up and down. Before the price changes direction the oscillator will change direction first, indicating the predicted direction that the price will move.
If the AC indicator is above the middle 0 line, it means the price is moving upward, and the longer the bars get, the higher up the price is going to move. However, if the indicator is above the middle line but the bars are red but are getting lower, it means that the upward movement is slowing down and is preparing to drop. So if the indicator is below the 0 line, the price is currently moving downward and if it gets longer downward, it means that it is accelerating its drop fast!
The Accelerator Oscillator is often used as a buy and sell signal, especially when the bars crossover the middle and when the bars start getting longer or shorter…
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