Percentage Price Oscillator
Type
Other indicator
Short introduction
The percentage price oscillator ("PPO") is a momentum oscillator that calculates the difference between 2 MAs as a percentage of the longer of these MAs.
Statement
By forming the difference, the indicator fluctuates freely upwards and downwards around the zero line. A signal is generated by crossing the zero line. The calculation generally subtracts the longer, "slower" MA from the shorter, "faster" MA.
Formula/calculation
PPO = 100 × ((MAx - MAy) ÷ MAy)
where:
MAx = moving average, shorter time period
MAy = moving average, longer time period
Interpretation
Similar to the MACD, the PPO is positive if the shorter MA is quoted above the longer one. If the shorter MA moves further away from the longer one, this is interpreted positively and vice versa.
Default setting
Depending on the analysed, that is:
- Short MA: 12 periods
- Long MA: 26 periods