Awesome Oscillator has been created by Bill Williams. You might get the impression that this indicator uses some complicated mathematical algorithm developed by some Harvard maths whiz kid. Infact this is a very simple indicator that uses 2 simple moving averages in an ingenious manner. Awesome Oscillator AO has many similarities with MACD but it is different than this indicator. The major difference is it uses 2 simple moving averages unlike MACD that uses EMAs. The 2 SMAs used by AO are 34 period and 5 period of the High and Low price midpoint. It has 2 colors. Green color is for increasing AO and red color is for decreasing AO. This is a good article on Awesome Oscillator that you can read.
The above youtube video gives a good overview of this indicator. You can also read this article that gives 4 Awesome Oscillator Day Trading Strategies. Twin Peaks on Awesome Oscillator is good strategy that can help you capture big moves. You should also watch this youtube video that explains how to trade with the Twin Peaks Strategy!
Now if you are interested in an indicator that can draw divergences on this oscillator than you can download this Awesome Oscillator Divergence Indicator for MT5 FREE here. Twin peaks on this indicator is essentially a divergence signal that you can trade. The problem with divergence is that there can be false signals. So you should be careful. This article also gives good explanation of the buy and sell signals generated by this indicator.