Filter_AO
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This script is a custom technical analysis tool designed to visualize and simplify market momentum by filtering the standard "Awesome Oscillator" data. Instead of showing a raw, fluctuating line that can be difficult to read at a glance, this tool categorizes price movements into distinct visual trends to help traders identify directional shifts more clearly.
Core Logic Overview
The script operates through three primary logical stages:
1. Momentum Calculation The foundation of the tool is based on the difference between two moving averages. It calculates a fast-moving average (representing recent price action) and subtracts a much slower-moving average (representing long-term price history). The resulting value represents the "momentum" of the market—essentially showing whether the current price is accelerating or decelerating compared to its historical norm.
2. Trend Direction Identification Once the momentum value is calculated, the script compares each new data point against the previous one. It looks for a "break" in the trend:
- If the momentum is rising, it identifies an upward trend.
- If the momentum is falling, it identifies a downward trend.
3. Visual Filtering and Separation The most unique feature of this script is how it handles the visual output. Rather than displaying all data in one continuous line, it splits the information into two separate histograms:
- Bullish Momentum: When the market shows upward movement, the tool populates a lime-colored histogram.
- Bearish Momentum: When the market shows downward movement, it switches to a red-colored histogram.
By zeroing out the opposing color during specific movements, the script eliminates visual "noise." This allows a trader to see exactly when momentum has shifted from positive to negative (or vice versa) without the distraction of overlapping data, providing a cleaner representation of whether the market is currently gaining or losing strength.
//+------------------------------------------------------------------+
//| Filter_AO.mq4 |
//| Copyright © 2004, MetaQuotes Software Corp. |
//| http://www.metaquotes.net/ |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2004, MetaQuotes Software Corp."
#property link "http://www.metaquotes.net/"
//---- indicator settings
#property indicator_separate_window
#property indicator_buffers 2
#property indicator_color1 Lime
#property indicator_color2 Red
//---- indicator buffers
double ind_buffer1[];
double ind_buffer2[];
double ind_buffer3[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- 1 additional buffer used for counting.
IndicatorBuffers(3);
//---- drawing settings
SetIndexStyle(0,DRAW_HISTOGRAM,STYLE_SOLID,2);
SetIndexStyle(1,DRAW_HISTOGRAM,STYLE_SOLID,2);
IndicatorDigits(MarketInfo(Symbol(),MODE_DIGITS)+1);
SetIndexDrawBegin(0,34);
SetIndexDrawBegin(1,34);
//---- 3 indicator buffers mapping
if(!SetIndexBuffer(0,ind_buffer1) &&
!SetIndexBuffer(1,ind_buffer2) &&
!SetIndexBuffer(2,ind_buffer3))
Print("cannot set indicator buffers!");
//---- name for DataWindow and indicator subwindow label
IndicatorShortName("Filter_AO");
//---- initialization done
return(0);
}
//+------------------------------------------------------------------+
//| Awesome Oscillator |
//+------------------------------------------------------------------+
int start()
{
int limit;
int counted_bars=IndicatorCounted();
double prev,current;
//---- check for possible errors
if(counted_bars<0) return(-1);
//---- last counted bar will be recounted
if(counted_bars>0) counted_bars--;
limit=Bars-counted_bars;
//---- macd counted in the 1-st additional buffer
for(int i=0; i<limit; i++)
ind_buffer3[i]=iMA(NULL,0,15,0,MODE_EMA,PRICE_CLOSE,i)-iMA(NULL,0,102,0,MODE_EMA,PRICE_CLOSE,i);
//---- dispatch values between 2 buffers
bool up=true;
for(i=limit-1; i>=0; i--)
{
current=ind_buffer3[i];
prev=ind_buffer3[i+1];
if(current>prev) up=true;
if(current<prev) up=false;
if(!up)
{
ind_buffer2[i]=current;
ind_buffer1[i]=0.0;
}
else
{
ind_buffer1[i]=current;
ind_buffer2[i]=0.0;
}
}
//---- done
return(0);
}
//+------------------------------------------------------------------+
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