The Accelerator Oscillator is the fourth dimension of the Profitunity system.
The AC Oscillator is a simple moving average of the difference between the AO Oscillator and a moving average of the AO. On the price chart, this represents a change in the speed of a trend. From a physics standpoint, the instant momentum starts to slow down, it is actually accelerating in the opposite direction.
The BWAC study postulates that price is the last market element to change. Before the price changes, momentum changes, and before momentum changes direction, there must be a deceleration until momentum comes to zero. Next, momentum must accelerate in the opposite way before price can change direction. Therefore, using the BWAC as an early warning signal may give you an advantage over other traders.
AC+ measures the acceleration in upward momentum and AC- measures the acceleration in downward momentum.
BW AC Parameters
•Display
•Zones: If checked, buy signals will become more conservative in the red zone, and sell signals will become more conservative in the green zone.
•Squat: Represents explosive situations where smaller bar ranges accompany increasing volume. In other words, the Market Facilitations Index (Range/Volume) is increasing. Values are none, tick (used for charts with bars shorter than daily), and vol (used for charts with bars of daily or longer).