Indicator Formula

Technical Details — Awesome Oscillator (AO)

Overview

AO is the difference between fast and slow SMAs of median price.

---

Mathematical Derivation

---

Compact Formula Summary

$$AO = SMA(MedianPrice, 5) - SMA(MedianPrice, 34)$$

Defaults: Fast = 5, Slow = 34

---

Complete Calculation Example

With 5-period SMA of median = 45.50 and 34-period SMA = 44.80: AO = 45.50 - 44.80 = +0.70 (bullish momentum)

---

Key Takeaways from the Example

1. Positive AO: Fast MA > Slow MA = bullish momentum
2. Crossing zero: Momentum direction change
3. AO magnitude: Larger values = stronger momentum

---

Caution

Important: AO’s SMA smoothing means it reacts slower than MACD to price changes. This reduces false signals but increases lag — trade-off between reliability and timeliness.