Awesome Oscillator & MACD Cross Tactic

The Awesome Oscillator & MACD Cross Tactic indicator is a momentum-based tool designed to identify potential local growth or decline in prices by combining the signals of the Awesome Oscillator (AO) and the MACD. It helps traders pinpoint trend continuations and reversals through a multi-layered approach involving standard crosses, AO "saucer" patterns, and advanced risk-adjusted signals.

Usage

The script can be used to identify entry and exit points based on the interaction between the AO, MACD, and price action.

• Standard Crosses: Circles on the MACD lines indicate standard crossovers. A green circle suggests a bullish crossover, while a red circle suggests a bearish crossover.
• AO Zero Cross: Crosses on the zero line (marked with an 'X') indicate momentum shifts.
• AO Saucer Patterns: Labeled "Saucer" on the chart, these patterns identify specific three-bar setups in the AO histogram that often precede continuation movements.
• AO & MACD Histogram Interaction: Yellow circles appear when the AO crosses the MACD histogram, which can be interpreted as a signal to close a position or expect a local trend exhaustion.
• Risky Pro Mode: When enabled, the indicator identifies "Rapid Response Areas" (shaded regions) and "Russian Roulette" signals. These are designed for volatile conditions where the MACD crosses specific statistical thresholds or historical AO extremes.

Details

The indicator calculates the Awesome Oscillator using the difference between a 5-period and 34-period SMA of the median price (HL2). The MACD is calculated using standard 12/26/9 settings.

A unique feature of this implementation is the "Tea Saucer" filter, which prevents signals from appearing exactly at timeframe transitions (e.g., the start of a new day) to avoid noise from session gaps. The "Risky Pro Mode" introduces dynamic bands based on a percentage of the moving average of AO peaks, providing context for whether a MACD cross is occurring at an overextended level.

Settings

General Settings

• Display AO tea saucers: Toggles the visibility of the AO saucer pattern labels.
• Filter saucers between 1M -1D timeframes: Prevents saucer signals from triggering on the first bar of a new daily or intraday session to reduce gap-related noise.

Risky Pro Mode

• Risky Pro mode: Enables advanced high-volatility signals including Rapid Area crosses and "Russian Roulette" flags.
• Rapid area size based on AO length (periods): Defines the lookback period for calculating the average peak momentum used for the risk bands.
• Rapid area max size, %: Determines the threshold percentage of the AO average peak to create the shaded "Rapid" zones.

FAQ

How do I interpret the "Russian Roulette" signals?

These are high-risk signals that appear when the MACD crosses at extreme levels relative to recent AO history. They are intended for contrarian or aggressive trend-following in highly volatile markets.

What is an AO Saucer?

An AO Saucer is a specific momentum setup where the histogram is above zero (for long) or below zero (for short) and displays a specific "dip" and recovery sequence over three bars.

How can I access this indicator?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.