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IFX_DAO indicator

IFX_DAO indicator (Double Awesome Oscillator) is a variant of Awesome Oscillator by Bill Williams presented in his trading chaos theory. The indicator consists of two Awesome Oscillator’s lines, rapid and slow.

Formula

Median price = (HIGH + LOW) / 2

Awesome Oscillator = SMA (Median price, 5) — SMA (Median price, 34)

Trading use

Used in Meta Trader 4, this oscillator combines two Awesome Oscillator’s indicators which are displayed on the chart as a histogram.

Here are the basic rules of trading according to Double Awesome Oscillator:

The indicator gives a buy signal when a red histogram of rapid Awesome Oscillator (AO) crosses a green histogram of slow AO from bottom to top

Traders should sell when a red histogram of rapid AO crosses a green line of slow AO from top to bottom

Trades should be closed when histograms intercross backwards

You should refrain from trading when the indicator’s lines are directed sideways. You had better open a trade when you can see an obvious trend has been formed for a certain financial asset

In case you see that indicator’s lines show mixed movement, you should trade in the direction of a slow AO’s line

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