What is the win rate of the Awesome Oscillator Trading Strategy? Does the Awesome Indicator work in Forex and Stock Market Trading? Well, we have tested the Awesome Oscillator before on the Trading Rush Channel, and it was not that awesome. It had a profitable win rate, but the win rate was not that good or bad. And it was certainly not better than some of the trading strategies we have seen on the Trading Rush Channel. When I tested Awesome Oscillator 100 Times, I used the zero line to enter the trades. If you don’t know what I’m talking about, check out that Awesome Oscillator video to learn more. Awesome oscillator with the zero line cross strategy gave late entry signals, and since the zero line cross trading strategy was not that good, some of the comments on that video suggested taking trades at the color change of the bars. Well, there is a similar widely used Awesome Oscillator Trading Strategy, and in this video, I’m going to test it 100 times to find it’s win rate so you don’t have to. And at the end of this video, I’m going to give the Awesome Oscillator Strategy a Trading Rush Score, to see where it ranks up against other strategies we have tested so far.
This is the Awesome Oscillator, and if you have watched the previous Awesome Oscillator Trading Strategy Video, you already know that the entry signal according to the Zero Line Awesome Oscillator Strategy, is right here. But if you look closely, the entry signal looks a little bit late. In fact, it was one of the reasons Awesome Oscillator only got an average win rate. So instead of buying and selling at the crossover, what will happen if you bought at the color change of the bars? Now remember, Awesome Oscillator is a momentum indicator, so these are showing the momentum. But many traders also use it to identify the trend direction. There is a zero line on the Awesome Oscillator, and in an uptrend, the awesome oscillator value will probably stay above the zero line. And in a downtrend, the Awesome Oscillator Value will probably stay below the zero line.
Lets say, there is an uptrend going on. Now in this uptrend, the Awesome oscillator will most likely stay above the zero line. It will show the increasing momentum. And during the pullback, when the price makes a small move down, it will change its color and start to go down. On the Trading Rush Channel, I have always said that it is a good idea to buy near the end of the pullback. Since this is an uptrend, we want to enter when the price loses its downward momentum. Last time, when the price was trending up, we entered a long position when the Awesome Oscillator Value crossed above the zero line. And we sold when the Awesome Oscillator was crossing below the zero line in a downtrend. This time, we are going to enter early to see what happens.
So the second Awesome Oscillator Trading Strategy goes something like this. When the awesome oscillator is below the zero line, you buy when the Awesome Oscillator value goes higher three times in a row. Why the third bar? Well, while testing, I found out that Awesome Oscillator was changing colors frequently in a range. So to avoid taking too many trades in a range market, the entry is when the Awesome Oscillator value goes higher three times in a row. The third bar can be above the zero line. Similarly, when the Awesome Oscillator is above the zero line, the short entry signal is when the Awesome Oscillator value decreases three times in a row.
But hold on a minute, at the start of the video, I said an awesome oscillator is also used to find the trend direction. When Awesome Oscillator value is above the zero line, it is an uptrend, and when the Awesome Oscillator value is below the zero line, it’s a downtrend. Well yes, but that is a short term trend direction. Subscribers of the Trading Rush Channel know, that we buy and sell in the direction of the long term trend. If there is a long term uptrend going on, we don’t want to sell in the opposite direction of it. Similarly, if there is a long term downtrend going on, we don’t want to buy in the opposite of it. And finding the long term trend direction is easy. We will simply use the 200 E MA. And we will take buy entry signals given by the Awesome Oscillator, only if the entry signal is above the 200 E MA. And we will only sell, if the entry signal is below the 200 moving average.
Furthermore, in the long setup, we will set the stop loss below the pullback. And in the short setup, we will set the stop loss above the pullback.
So after taking 100 trades with this Awesome Oscillator Trading Strategy, here’s what I found out.
Number 1. Since we are entering at the third bar, and because we didn’t buy and sell immediately after the color change, a lot of false signals were filtered. But that wasn’t enough in some market conditions. You see, when the price movement is good, or in other words, when the candles are moving away from the previous candles, the awesome oscillator will give some of the best entry signals. But when they don’t move away from the previous candle, and most of the time they don’t, awesome oscillator bars change colors frequently. When this happened, some trades were won. And when the price got really choppy in the sideways market, Awesome Oscillator gave a lot of false entry signals in a row. In a range market, it is normal for a trend following strategy to give multiple false signals in a short period of time. But some strategies like the MACD or Ichimoku Cloud we have seen on the Trading Rush Channel, don’t give that many false signals in a range.
In the Trading Rush App, the win rate went up at the start, but then slowly went down, and went up, and down, and up. As you can see, the profit graph was not really consistent like some other strategies we have seen on this channel.
But after taking 100 trades with the Awesome Oscillator Trading Strategy, it got a 45 percent approximate win rate, which is more than what the Zero Line Awesome Oscillator got. And just like the previous Awesome Oscillator Trading Strategy, it made money, but the profit graph was not consistently going up in one direction like the profit graph of some other strategies we have seen. The awesome Oscillator lost 9 trades in a row, and won 6 times in a row.
And now, let’s give this Awesome Oscillator Strategy a Trading Rush Score.
It gets a 5 out of 10 in the win rate category. The win rate was profitable, but this strategy has a lot of potential, and you can increase the win rate by using some other indicators to filter the choppy and range market. I have already discussed a few indicators that can filter the range market, check them out to learn more.
In the easy to use category, it gets a 7.5 out of 10. All you have to do is look at the awesome oscillator bars, and enter when the Awesome Oscillator value goes higher or lower three times in a row.
In the reliability category, it gets a 4.2 out of 10. It gives too many false signals if the price movement is not good.
In the consistent profits category, it gets a 1 out of 10. The profit graph in the Trading Rush App was looking like a mess.
This Awesome Oscillator strategy is trying to give entry signals in the direction of the trend, and it does that job pretty good if the price movement is good. So it gets a 4.2 out of 10.
The only difference between this and previous Awesome Oscillator Strategy is that, the previous was giving late entry signals, and this one is sometimes giving too many signals because of the early signals.
So the TR Score is 21.9 out of 50. And it ranks 20th from the top, just after Golden Cross Trading Strategy, and before the Connors RSI trading Strategy.
And That’s all.
