RSI vs Awesome Oscillator

Michael Whitman · Trading since 2017, full-time since 2020 · Reviewed 2026-09-08

One of these is capped and the other is not. That places them in different categories despite both being called oscillators and both being read for momentum.

What each one is

The relative strength index compares recent gains with recent losses, producing a reading confined between nought and one hundred. The relative strength index covers it.

The awesome oscillator subtracts a longer average of bar midpoints from a shorter one and plots the result as a histogram with no limits. The awesome oscillator covers it.

The second is a close relative of MACD. A difference between two averages, displayed as bars, using midpoints instead of closes.

Where they differ

Whether the reading has limits. One cannot exceed its range; the other can print anything, so its values mean something only relative to that instrument’s own history.

What each is measuring. How one-sided recent bars were, against whether two averages are separating. Position on a scale and rate of change are not the same question.

What the input is. Closes for one; midpoints of each bar’s high and low for the other, which means they disagree most on bars with long wicks.

How each is read. Thresholds and extremes on one; bar colour, zero crossings and the size of successive bars on the other.

Where they agree

Both are transformations of the same price series. Neither brings in information from outside it, so agreement between them is arithmetic rather than evidence.

Both lag. Every value in either came from bars that have already closed, and neither can turn before price does.

Both fail in a range. On this site’s shared series direction runs average 2.01 bars with a longest of 11, and short runs produce constant threshold crosses and constant colour changes.

And both cost a round trip per signal acted on — about 2% of the median bar range of 0.493 here — which a colour-change rule pays extremely often.

Which one to use

Run the relative strength index when you want comparability. A bounded reading behaves the same way on every instrument, so a threshold you learn on one market carries to another.

Run the awesome oscillator when acceleration is your question. Whether successive bars are growing or shrinking is genuine information that a capped reading cannot express.

Run MACD instead if you want that same question answered with far more support behind it. The awesome oscillator is a variant of the same idea with a smaller community around it.

And run one, not both. They read the same bars, so a chart carrying both has one observation on it twice, drawn two different ways.

Why the histogram misleads

Because a colour change is a very small event. One bar slightly larger or smaller than the last flips it, and in a quiet market that happens constantly without anything having changed.

And because the scale is instrument-specific. A histogram bar of a given height is large on one market and unremarkable on another, so there is no level to learn.

What to settle before using the histogram

Decide what counts as a signal. A colour change, a zero crossing, or a run of expanding bars — those are three different rules with three different trade counts, and only one of them should be yours.

Read it against the instrument’s own history. Since the scale has no limits, the only reference is what this market has printed before, which means a new instrument needs a fresh calibration.

Do not compare its values across markets. A reading that looks decisive on one is ordinary on another, and there is no fixed range to normalise them.

And check what midpoints do to it. Using each bar’s midpoint rather than its close means gaps and long wicks register differently — on this site’s shared series the largest single bar range was 2.338 against a median of 0.493, and that gap is where the two inputs part company.

The original data

Of the 24,971 unique videos in research/search-study-corpus.jsonl, no title compares these two directly — this pair is constructed from two subjects the corpus covers separately. Separately, the awesome oscillator appears in 53 titles at a median of 10,321 across 43 channels, and the relative strength index in 820 at a median of 5,021. The counts come from site/corpus_count.py.

53 videos on the histogram at 10,321 against 820 on the bounded one at 5,021. A fifteenth of the coverage and double the audience per video — a smaller subject drawing far more interest per upload, which is the same pattern the less-taught tools show throughout this section.

The answer to the question on that chart is that a colour change is one bar’s worth of information. It means this bar’s separation was slightly smaller than the last one’s — which happens constantly and is not, on its own, an event.

When it fails

The failure is trading every colour change, and a quiet market produces one every few bars. The histogram flips whenever successive bars differ slightly in size, which in a range is most of the time. Each flip reads as momentum turning because that is how the display presents it. Every one costs a round trip, the sequence continues for as long as the range does, and none of the individual flips was wrong — they were all correctly reporting a difference far too small to trade.

The second failure is comparing its values across instruments. The scale is open.

A third is running it beside MACD. They are the same idea twice.

A fourth is reading a bounded extreme as exhaustion. It reports one-sided bars.

A fifth is using it without a written signal definition. There are three candidates.

And a sixth is expecting either tool to lead price. Both are computed after the bar.

Related

The relative strength index covers the bounded oscillator. The awesome oscillator covers the midpoint histogram. And MACD covers the better-supported version of the same difference-of-averages idea.

This page is educational, not financial advice. Test every idea on your own charts before risking money.