Mastering Awesome Oscillator Divergence for MetaTrader 5: Your Go-To Indicator

Hey there, fellow traders! Today, let’s dive into the Awesome Oscillator Divergence indicator for MetaTrader 5 and explore how it can enhance your trading strategy.

This handy tool not only plots divergence lines on the Awesome Oscillator but also provides clear buy and sell signals with arrows. It comes packed with useful features, including:

• Bullish Regular Divergence: Marked in solid blue lines,
• Bullish Hidden Divergence: Displayed with aqua dotted lines,
• Bearish Regular Divergence: Shown in solid red lines,
• Bearish Hidden Divergence: Illustrated with orange dotted lines.

Importantly, the divergence lines do not cross through the body of the indicator or histogram, keeping your analysis clean and straightforward.

This indicator is based on the principles of divergence as outlined in the Signals of the Awesome Oscillator. For instance, in a Bullish Regular Divergence scenario:

Fig. 1. Bullish Divergence example

Here’s what we mean by divergence: the initial bottom of the indicator is higher than the previous one, while the corresponding price valley dips lower than before. Plus, the indicator must stay below the zero level.

Key Parameters:

Let’s take a look at the input parameters for this indicator:

Fig. 2. Input parameters of the Awesome Oscillator Divergence indicator

Two parameters stand out:

1. Deviation Percent: The default value is set at 0.05, indicating the maximum percentage of the AO value that can stray out of range.

Fig. 3. Awesome Oscillator percent ratio

If you set this parameter to 0.0, all AO values will remain within the range.

2. Indicator Trend Line Across Histogram Body: The default setting is ‘no.’ This setting can significantly impact how the indicator performs, as shown in the screenshots below:

Fig. 4. Indicator Trend Line Not Allowed Across Histogram Body

Fig. 5. Indicator Trend Line Allowed Across Histogram Body

So there you have it! The Awesome Oscillator Divergence indicator can be a powerful addition to your trading toolkit. Whether you're spotting bullish or bearish trends, this indicator will help you make informed trading decisions. Happy trading!