In This Video: Why We Stopped Using AO The Awesome Oscillator Despite the Fact its Worth 7 Figures
This is the Story of the Humble Oscillator 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.
The Way to make profit is to find a pattern that gives you statistical edge, its easy to find, and its tradeable.
The pattern of Find a wave 3 and 4, to catch wave 5, i.e. Setup 1 is one that gives you Higher ODDS of success.
Now you have options to apply risk and trade management techniques to manipulate results. e.g. in this example of Setup 1 on DAX h1.
You could have taken Entry using the Standard Box entry with SL above the box and Entry Below The Box. You will then double that distance between SL and Entry and that would be your 2X (or 2R) Target Point or Take Profit Point.
#DAX30 H1 Chart - Setup 1 Example
But also, you could have done this.
Took entry below the box, Had 50 SL, that was somewhere between the box. and set a 100 points SL. That meant I got 2R profit, and it was hit , in time and points, far before the example above.
There are a number of ways in which you can benefit from a pattern that repeats often enough and gives a higher chance of happening. In other words, as long as you know your edge, you can benefit from it by utilising several different trade and risk management techniques. T
The Setup that gives us the edge in the market is what we call the Setup 1. And here it is. Below I give examples of two types of setup 1. If you are an AIMS Member you'll benefit more from the following images as you'll know the background and further explanation about it. To Learn more JOIN AIMS TODAY
