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Supported Platforms: | TradeStaion, Multicharts |
| Market: | All (Stock, Futures, Forex, Options) | |
| Time Frame: | Ticks, Minute, Daily | |
| Licence: | Lifetime |
What is PPO?
The Percentage Price Oscillator – PPO – is a momentum oscillator that measures the difference between 2 moving averages, as a percentage of the larger moving average. The PPO is some what of distant cousin to the MACD, it consists of a PPO line, a signal line and a histogram. Entry Signals are generated with crossovers of the PPO line and the signal line, the histogram and divergences.
How is PPO better then MACD?
The main advantage of the PPO is in the way its calculating is built. PPO in calculated as percent change while MACD measures in absolute values. This key feature makes it more precise and easier to use. It also allows you to use the PPO indicator to compare stocks with different prices ranges. For example, regardless of the price of a stock, a PPO result of 4 means that short-term average is 4% above the long-term average.
GBPUSD Forex 60 Min Chart:
The yellow line represents the PPO, the thin red line is the PPO Signal. The histogram represents the difference between the PPO line and the PPO Signal Line.
Notice that the histogram changes colors according to its direction for ease of use.
How to Use the PPO?
Entry Signals: The PPO can be used to recognize a change in trend direction. When the PPO line crosses above the Signal line we have a Buy Long signal. This is also indicated by the histogram crossing the zero line from beneath. Same goes for short, when the PPO cross below the Signal line, histogram cross the zero line from above we have a Sell Short Signal.
IBM Daily Chart: We can clearly see 2 nice trades, the first a short trade when the PPO crosses below the signal. The second trade would have served as a stop and reverse in this case, a very nice Long Buy trade when the Histogram becomes positive.
Divergence: Another very common way to use the PPO indicator is Divergence. Long Divergence Example : The price action has 2 upper pivots, where the newer one is higher, meanwhile the PPO has 2 upper pivots where the never one is lower. This is a powerful short signal.
Dell 60 Min Chart We have a very nice Short Divergence, and we also have a PPO and Signal cross, together these 2 signals result in a very powerful Short Trade.
- Visually Enhanced
- Histogram changes colors according to direction
- Adjustable length
- Familiar Parameters same as in MACD
See the DIG PPO in action:
 LMT – 30 MIN |
 QCOM – 15 MIN |
 XOM – 5 MIN |
Buy a Lifetime Licence for the DIG PPO:
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Please note that we can also modify this indicator to your specific needs for example:
• Adding Alerts, and Emails with specific user defined code Get a quote on custom indicator coding here >> |
After purchase, the code will be sent to your email with instructions on how to install & use it.It usually takes us 48 to send the product.
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