What the Accelerator Oscillator measures
The Accelerator Oscillator (AC) is a Bill Williams indicator. It is built on the Awesome Oscillator (AO), which measures momentum, meaning how strongly price has been moving. AC goes one step further and measures acceleration, meaning whether that momentum is speeding up or slowing down.
Think of a car. Its speed is momentum, and pressing or releasing the pedal is acceleration. A car can still move forward while it slows down. In the same way, price can still rise while AC already shows that upward momentum is fading. That is why AC often changes direction before AO does. Even so, it is still calculated from past prices, so it is not a forecast. See leading vs lagging indicators.
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Formula and default settings
AC is calculated in two steps:
- AO = a short simple moving average of the median price minus a long simple moving average of the median price. The median price is (High + Low) / 2.
- AC = AO minus a short simple moving average of AO.
The built-in version in MT4 and MT5 uses Bill Williams' fixed periods and has no period inputs. You can only change colours, levels and visual style. To test other lengths, you need a custom indicator or your own code. The averages are simple moving averages, as explained on the SMA indicator page.
How to add it in MT4 and MT5
In both MetaTrader 4 and MetaTrader 5, open a chart and go to Insert → Indicators → Bill Williams → Accelerator Oscillator. It appears as a histogram in a separate window below the price chart. Bar colours follow a simple rule:
- Green bar: the current AC value is higher than the previous one.
- Red bar: the current AC value is lower than the previous one.
The colour shows the change from the previous bar. It does not show which side of zero the value is on.
How to read it: a drawn example
The sketch below is illustrative only, with no real prices. It shows an uptrend that keeps rising while its push weakens:
| Phase | Price | AO | AC |
|---|---|---|---|
| Push starts | Rising | Rising | Green bars, growing |
| Push fades | Still rising | Still above zero | Red bars, shrinking |
| Momentum turns | Flat or dipping | Falling | Crosses below zero |
When reading AC, traders usually note three things:
- Colour sequences. A run of bars of the same colour shows that acceleration is persisting.
- Position relative to zero. This shows whether acceleration is positive or negative overall.
- Disagreement with price. For example, price makes a new high while AC makes lower peaks. See divergence trading.
Typical uses
An "accelerator oscillator strategy" is rarely AC alone. Common frameworks combine it with:
- a trend filter, such as the Alligator indicator or market structure;
- levels from support and resistance;
- a higher timeframe to give context.
In these setups, AC is used to judge whether a move is gaining or losing force. It is not used on its own to decide trades. Test any approach on a demo account before using real money.
Where it misleads
- Ranges. In sideways markets, colours flip often and AC crosses zero many times without any lasting move.
- News spikes. A single large candle can distort both averages for several bars afterwards.
- Low timeframes. Spread and noise dominate there, so colour changes carry little meaning.
- Strong trends. A trend can keep going while AC repeatedly shows slowing acceleration. Reading every red run as a top leads to many false exits or counter-trend entries.
- Thin sessions and gaps. The median price reflects sparse trading and can give unrepresentative readings.
For experienced traders: because AC is effectively a second derivative of smoothed price, it amplifies noise. Some traders confirm a reading only when the bar has closed, as AC changes on the live bar. Others compare its behaviour with Momentum or ROC to see whether the change in acceleration also shows up in plain momentum.
Leveraged forex and CFD trading can lose money fast. No indicator reading removes that risk. Read risk management before trading.
Frequent questions
Is the AC indicator the same as the Awesome Oscillator?
No. AO measures momentum. AC measures the change in that momentum, calculated as AO minus its own moving average.
Can I change the periods of the Accelerator Oscillator in MT4?
The built-in MT4 and MT5 version has no period inputs. Changing the periods requires a custom indicator.
Does a green bar mean price will rise?
No. A green bar only means the current AC value is higher than the previous one. It says nothing certain about the next price move.
Does AC repaint?
The value on the live bar changes until that bar closes. Closed bars do not change. See repainting indicators.
Where can I learn related tools?
Start with technical analysis and the Gator Oscillator.