Percentage Price Oscillator - PPO


DEFINITION of 'Percentage Price Oscillator - PPO'

A technical momentum indicator showing the relationship between two moving averages. To calculate the PPO, subtract the 26-day exponential moving average (EMA) from the nine-day EMA, and then divide this difference by the 26-day EMA. The end result is a percentage that tells the trader where the short-term average is relative to the longer-term average.

Calculated as:

Percentage Price Oscillator (PPO)

BREAKING DOWN 'Percentage Price Oscillator - PPO'

The PPO and the moving average convergence divergence (MACD) are both momentum indicators that measure the difference between the 26-day and the nine-day exponential moving averages. The main difference between these indicators is that the MACD reports the simple difference between the exponential moving averages, whereas the PPO expresses this difference as a percentage. This allows a trader to use the PPO indicator to compare stocks with different prices more easily. For example, regardless of the stock's price, a PPO result of 10 means the short-term average is 10% above the long-term average.

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  1. Why is the Percentage Price Oscillator (PPO) important for traders and analysts?

    The percentage price oscillator (PPO) is a technical trading indicator that traders and analysts primarily use for measuring ... Read Full Answer >>
  2. What is a common strategy traders implement when using the Percentage Price Oscillator ...

    A common trading strategy stock traders implement using the percentage price oscillator (PPO) involves using the indicator ... Read Full Answer >>
  3. What are the best technical indicators that complement the Percentage Price Oscillator ...

    The percentage price oscillator (PPO) is calculated by subtracting a long-term exponential moving average (EMA) from a shorter-term ... Read Full Answer >>
  4. How do I use Percentage Price Oscillator (PPO) to create a forex trading strategy?

    The percentage price oscillator (PPO) is a momentum indicator that is essentially a variation on the popular moving average ... Read Full Answer >>
  5. What does a cross over on the Percentage Price Oscillator (PPO) mean?

    A crossover on the percentage price oscillator (PPO) indicates a shift in market momentum, either from buying to selling ... Read Full Answer >>
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    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>

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