# Exploring the Awesome Oscillator | Cameron May | 10-7-19 | Getting Started with Technical Analysis

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Now. Somewhat, differently than the MACD the, moving, averages that are being compared are the 34 and the. 5. Also. Different. From the MACD is, how. The. Moving averages themselves are constructed not just in time frame but in what time of the day is used. With. The MACD, the, closing, values are used to construct those moving averages, with. The awesome, oscillator, it's, actually. Instead. Of taking just too close, we. Take the high of the day in the lower the angle right in the middle it's the midpoint that, is, used on a daily basis, to construct the, 34, period moving average and, then the 5, period, moving average, but. Really, the the calculation, is pretty straightforward get, the average, midpoint. Over, a period of time for. The 34, 34, days or 34, weeks or 34 hours whatever time. Frame we're looking at on a chart in this case we're using a daily chart and, then. We take the, 5, period, moving average. For. Those midpoints. And we, take the we. Just subtract the 34, from the 5 that's. It so let's say over the last 5 days using. Maybe, wel. As an example maybe. The the over the last 5 days, wel. Has averaged about. \$91. At the midpoint now I'm just estimating I don't know and. Let's say over the last 34, days so this is stretching back a little bit further maybe. The average value, is like 89. So. 91-89. Would produce a positive value of 2 as long as the 5 period. Moving average is above, the 34, it produces, a positive, value, for the awesome oscillator, and that, gets plotted, above. The zero line if. The 5 is below the 34, that. Resort will result in negative values, and we'll see a red, histogram. So, that's the construction, and that was quite, a bit quicker than our discussion, of a MACD, construction, right so. Let's talk about the potential, application. Of. The. Of. The awesome oscillator, let me just also check in if, we, can see if we've had any questions, yet. Vintage, souffle, okay you. Say can we look at the specific symbol. You, know what typically, I'll. Prepare. My own symbols, to illustrate a concept but sometimes we'll just throw in a random one every, now and again to see. How this might apply but. How about we. Do get down to application. Once we've applied, this. Oscillator. We wind up with this with, this green and red indicator, so I want to focus on that let's zoom in I'm gonna hide this left column for a moment and. I, want to shift modalities. Here for, just a second alright so. If you will join. Me on. Let's. Pop over here to our bigger, screen and, I. Just want to talk about. How. This indicator, might be used alright. So. As, you'll. Notice very much very similar to the MACD we see oscillations. We hit green. Peaks and red. Valleys, on this, indicator and what, some technicians, will do is they'll, look for those, peaks and valleys as potential. Into, entries. For. Bullish. Entries and for bearish entries, so. Let's, talk about three different potential. Entries and how, about we switch up let's. Come up here using our well. Tower first, thing I want you to do is, make. A note of the general trend of well, tower here, overall. Pretty. Much an uptrend so, we're talking about a bullish. Potential. Entry signal here so, as we switch up our timeframe to get a closer look at, that. Well, tower what. We're going to focus on are these peaks and these, troughs, this is kind of a shallow trough, here here's, a more. Extreme. Peak and what, some technicians will do when, we have an established upward, trend, okay. So the trend generally. Moving higher here. We. Might look at these Peaks and as we dip down from a peak down to a trough. That may be, a hint, of a. Pending, entry what. That may and what that may imply for the chart is that the chart that was going, up may be starting, to pull back, all. Right and this. Oscillator, is a momentum, oscillator just, like the MACD so. What some technicians will do first, signal, is to look for after, that oscillator, has dipped down below, the zero line they'll. Look for a change of color so just remember that a color, change, below. The zero line so, here I want to draw I want to. Emphasize. This little spot right here okay. You'll notice. That. Our zero. Line we started, to get red. Histogram. Bars, penetrating. Down below that zero line that's a hint that's a setup for, a pent a potential signal but, then right here. Okay. We had a red bar followed.