Direct Answer
A Bill Williams indicator that measures the acceleration of market driving force. It is the Awesome Oscillator minus a 5-period simple moving average of itself, so it shows whether momentum is speeding up or slowing down. Positive values mean momentum is accelerating upward relative to its recent average, negative values the opposite.
Accelerator Oscillator: Formula, Meaning, Signals, Examples and How to Use It
How Is Accelerator Oscillator Calculated?
A Bill Williams indicator that measures the acceleration of market driving force. It is the Awesome Oscillator minus a 5-period simple moving average of itself, so it shows whether momentum is speeding up or slowing down.
Formula: AC = AO - SMA(AO, 5), where AO = SMA(median price, 5) - SMA(median price, 34)
Inputs:
- High and low prices to build the median price (H+L)/2
- Awesome Oscillator values
- 5-period smoothing of the AO
Worked example. With an Awesome Oscillator reading of 2.4 and a 5-period average of 1.9, the Accelerator Oscillator is 0.50. The inputs are illustrative numbers, not market data.
Reading it. Positive values mean momentum is accelerating upward relative to its recent average, negative values the opposite. Because it is a second-order measure, it tends to turn before the Awesome Oscillator and price.
Limits. Being a derivative of a derivative, it is very noisy and flips sign often. It can change direction without any follow-through in price, so it is usually read alongside other context.
What is Accelerator Oscillator?
A Bill Williams indicator that measures the acceleration of market driving force. It is the Awesome Oscillator minus a 5-period simple moving average of itself, so it shows whether momentum is speeding up or slowing down.
How to use Accelerator Oscillator
Positive values mean momentum is accelerating upward relative to its recent average, negative values the opposite. Because it is a second-order measure, it tends to turn before the Awesome Oscillator and price. A reading alone is never a buy or sell signal; it needs context from price structure, volume, volatility and the broader market regime.
Strengths
- Subtracting a 5-period average of the Awesome Oscillator isolates the change in momentum, so the sign shows whether the gap is widening or narrowing.
- It is built from median prices only, high plus low halved, so it needs no volume and works on any instrument with an OHLC history.
- Reproducible when the formula and data convention are fixed.
Weaknesses and limitations
- Its value is a difference of a difference in price units, so it is small and has no fixed threshold that carries over between instruments.
- The 5, 34 and 5 period settings are conventional rather than derived, so they may not suit very short or very long bar sizes.
- Correlated indicators can create false confidence by repeating the same underlying information.
Editorial and risk note
This page is educational content, not individualized investment advice. It should not imply guaranteed prediction, accuracy or outperformance.
Frequently Asked Questions
Is Accelerator Oscillator a buy or sell signal?
No. Positive values mean momentum is accelerating upward relative to its recent average, negative values the opposite. Being a derivative of a derivative, it is very noisy and flips sign often. A trade built on it still needs a trigger, an invalidation rule, a position size and realistic execution assumptions.
What is the best setting for Accelerator Oscillator?
Accelerator Oscillator takes these inputs: high and low prices to build the median price (H+L)/2; awesome Oscillator values; 5-period smoothing of the AO. There is no universal best setting for the tunable ones, so test them across instruments, regimes and out-of-sample periods and favor stable parameter regions over one historical winner.
Can Accelerator Oscillator be used by itself?
Being a derivative of a derivative, it is very noisy and flips sign often. It can change direction without any follow-through in price, so it is usually read alongside other context. For that reason it is read next to measures of direction, participation, valuation, liquidity and risk, not alone.
Does Accelerator Oscillator work on every timeframe?
The calculation (AC = AO - SMA(AO, 5), where AO = SMA(median price, 5) - SMA(median price, 34)) can be run on any bar size, but behavior is not portable: a reading on a five-minute chart describes a very different market window from the same reading on a daily chart. Validate the exact timeframe before relying on it.
Why does Accelerator Oscillator give false signals?
Its value is a difference of a difference in price units, so it is small and has no fixed threshold that carries over between instruments. The 5, 34 and 5 period settings are conventional rather than derived, so they may not suit very short or very long bar sizes. Lag, noise and regime changes add to this, because market participants react to new information after the reading is calculated.
How should Accelerator Oscillator be backtested?
Rebuild Accelerator Oscillator from high and low prices to build the median price (H+L)/2 using point-in-time data, write the rules before testing, include delisted securities where relevant, model realistic fills and costs, reserve a validation sample and compare with a simpler baseline.