Accelerator Oscillator

What is the Accelerator Oscillator?

The Accelerator Oscillator (AC) is Bill Williams' measure of momentum's acceleration. It takes the Awesome Oscillator (the 5-period simple moving average of median price minus the 34-period one) and subtracts a 5-period simple moving average of that oscillator from it. What remains is the change in the driving force rather than the force itself. Williams' premise: price is the last thing to change, momentum changes before price, and acceleration changes before momentum, so AC is meant to turn earliest of the three.

AC plots as a zero-centered histogram, conventionally colored by whether each bar is higher or lower than the previous one. Rising bars above zero read as accelerating upside pressure; falling bars below zero as accelerating downside pressure. Because it is built entirely from moving averages of median price, it remains a smoothed, lagging statistic: a single color flip is common noise, not proof of a turn.

How traders use it

• As a permission filter over directional entries: Williams' rules require consecutive rising bars before a buy and consecutive falling bars before a sell, and demand an extra confirming bar when the trade is taken from the wrong side of the zero line.
• As a deceleration warning: shrinking bars while price grinds to fresh highs or lows show the move's force fading, often ahead of a turn in the Awesome Oscillator itself.
• As a divergence tool: regular divergences between AC extremes and price extremes are used to anticipate exhaustion, normally with structural confirmation before acting.