Accelerator Oscillator (AC): Trading signals for binary options
Accelerator Oscillator (AC) is an advanced momentum indicator that identifies the acceleration and deceleration of the current market driving force. For binary options traders, it serves as an accurate tool for determining entry points at the very beginning of a strong price movement. In this guide, you will learn how to read its signals on the trading platform and apply them correctly for trading with expirations ranging from 1 to 5 minutes.
What is an Accelerator Oscillator and how does it work?
The Accelerator Oscillator (AC) is derived from the Awesome Oscillator (AO) indicator. Its key task is to measure the strength of a trend and predict its reversals before they become apparent on the chart. Unlike many oscillators, AC focuses on the acceleration of the current driving force, which makes it a leading indicator.
Calculation principle:
The indicator calculates the difference between the 5-period and 34-period simple moving averages (SMA) based on median prices (HL/2). This result is then smoothed by a 5-period SMA. The AC histogram displays the change in this difference compared to the previous period, showing the acceleration or deceleration of momentum.
Accelerator Oscillator Settings
No complex configuration is required to use the indicator on the broker's platform. The standard default settings are optimal for most binary options strategies.
Click on the “Indicators” button in the top menu of the platform.
Enter “Accelerator” in the search bar or find it in the list.
Select the indicator from the results. It will be applied to the chart.
The default parameters (5, 34, 5) do not need to be changed. You can only adjust the color of the columns for better visualization.
Accelerator Oscillator signals for Call and Put trades
When trading binary options, we use momentum reversal points. Here are the key signals:
1. BUY signal (Call):
Condition: The AC histogram column has changed color from red to green and is above the zero line.
Strategy: This is a signal of growing bullish momentum. A buy trade should be opened when the first green column appears after a series of red ones.
Expiration: 2 to 5 minutes.
2. Signal to SELL (Put):
Condition: The AC histogram column has changed color from green to red and is below the zero line.
Strategy: This is a signal of growing bearish momentum. Open a down trade when the first red column appears after a series of green ones.
Expiration: 2 to 5 minutes.
An effective strategy with Accelerator Oscillator for binary options
One of the most reliable approaches is trading from zero level.
Scenario: After a pronounced movement, the price corrects, and the AC histogram returns to the zero line.
Action: We wait for the AC to reverse and give a signal (change color) in the direction of the main trend, but still not far from the zero line.
Advantage: This signal has a high probability of success, as it indicates a continuation of the trend after the correction.
Important note: In binary options, the concepts of Stop Loss and Take Profit in their classical sense do not exist. Their role is performed by the expiration time. Your task is to correctly determine the direction of price movement by a given time. Risk management consists of the amount of investment in a single trade (it is recommended to invest no more than 1-5% of the deposit).
Combining Accelerator Oscillator with other instruments
To filter out false signals, the Accelerator Oscillator must be combined with other analysis methods:
Moving averages (MA): Only open trades in the direction of the trend determined by the MA (e.g., price above the 100-period EMA for an uptrend).
Support and resistance levels: AC signals received near key levels are more powerful.
Price action: A reversal AC signal must be confirmed by a corresponding candlestick pattern (e.g., pin bar or engulfing).
Conclusion: Accelerator Oscillator is a powerful tool for short-term trading when used as an entry trigger within a comprehensive strategy. Always wait for a clear color change in the histogram and confirm the signal on the main chart.