How an Oscillator Changed the Industry
How a simple moving average crossover can become such an amazing indicator.
First I’m going to Introduce the AO
Then I’m going to Explain the AO and take you through the internal structure of the AO.
The skeleton of it if you like, oh, like the doctors say, we’re gonna look at the Anatomy of AO.
In fact that could be a great title for this video. The Anatomy of AO.
Second, I’ll go into how we arrived at the AIMS Wave indicator and Lastly, we will explore
the advanced version of AISM Wave, the AIMS eWave.
So let's begin.
Lets first Install The MT4 Standard Indicator called the AO.
AO stands for Awesome Oscillator. Bill Williams introduced this indicator in their original course and
called it the Awesome oscillator because according to Dr. Wiliams this is like “tomorrow’s' Wall
Street journal”. (Check out the Famous Setup for this)
He found that this indicator can plot a perfect elliott wave count without learning the complex way
of counting the wave introduced by the founder of Elliott wave who named it after himself, humble
guy indeed. So Mr. R. N Elliott thought the Market is an intricate mesh , kinda like a Lego work
of waves that fall into two main categories.
The market i.e the chart is made of impulse and
corrective waves. And that impulse waves have 5 waves inside them but the corrective waves
have 3 waves inside them. Stop stop stop. Its already getting complicated…
Forget that…let's cut to the chase…
You should know if you’ve read about the “The Elliott Wave Theory” that
the meat of the move is in the impulse waves. And Everyone wants to HIT the WAVE 3.
You know why?
Because Wave 3 is the biggest portion of a strong trend. So logically everyone wants
to traded wave 3.
What if I were to tell you that the traders who chase wave 3’s almost always miss the
move because they look for the wave within the sideways markets.
A Wave 3 is kinda like a seed that is buried under soil. But that there is a bunch of seeds
spread across the field and you don’t know which one will germinate first. Which one
will popup tomorrow and turn into a seedling. So you start digging for seeds.
Now that’s not a good idea is it? Because this could destroy the seed. So you wait.
Most traders waste their time and money chasing the Wave 3 or finding the wave 3.
What we have found in the last 10 years of trade is that chasing the wave 3 is going to
make you lose a lot of money. Because Wave 3’s grow out of dirt, that is the sideways
market, and that means trading breakouts out of “no Trend Zones”. The clusterfuck areas,
you know, the charts that look like poop.
So what is the solution? What we have found is that the best way to trade the wave is to
let the 3 happen, wait for 4 and Trade Wave 5. Because if there is a 3 and 4 there will
almost always be a Wave 5. But if you try to trade wave 3, you have to find wave 1-2 and
that is the hardest thing to do, especially on the lower time frames. Why make things
difficult if there is a simpler solution available right?
The approach we take is trading the wave 5. There are several benefits of this. Wave 5
can be predicted with 80% success rate. The risk of taking the trade is minimal and the
reward is 3-5 times over. Risk a dollar for 5 dollar return. Cool.
So what about AO? Yes, the AO. Dr. Williams found that you can spot and count the waves,
simply by looking at the peaks and bottoms created by THIS indicator.
Check out This Video I post earlier about AIMS Wave.