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Key Takeaways

Difficulty:Beginner
Reliability:High
Category:momentum
Timeframes:1H, 4H, Daily

Percentage Price Oscillator (PPO)

momentumšŸ“Š 1H, 4H, Daily

Like MACD but expressed as percentage, making it comparable across different assets.

Formula

Code
PPO = ((EMA12 - EMA26) / EMA26) Ɨ 100
Signal = EMA(PPO, 9)

Detailed Explanation

PPO is essentially MACD expressed as a percentage, making it normalized and comparable.

**Advantage over MACD:** - Can compare momentum between $10 and $1000 stocks - Percentage format is scale-independent - Same interpretation as MACD

Parameters

Fast
Default: 12
Fast EMA period
Slow
Default: 26
Slow EMA period
Signal
Default: 9
Signal line period

šŸ“ˆ Bullish Signals

PPO crosses above signal line or zero line, bullish divergence

šŸ“‰ Bearish Signals

PPO crosses below signal line or zero line, bearish divergence

Python Implementation

PPO calculation

Python
import pandas_ta as ta
ppo = ta.ppo(df['close'], fast=12, slow=26, signal=9)
df['PPO'] = ppo['PPO_12_26_9']
df['PPO_Signal'] = ppo['PPOh_12_26_9']

TradingView Pine Script

Try on TradingView
JavaScript
//@version=5
indicator("PPO")
[ppo, signal, hist] = ta.macd(close, 12, 26, 9)
ppo_pct = (ppo / ta.ema(close, 26)) * 100
plot(ppo_pct, "PPO", color=color.blue)
šŸ“Š Use TradingView for Advanced Charting
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MT5 MQL5 Code

C++
// Custom PPO implementation using EMA calculations

Python Libraries

pandas-ta
Technical analysis
pip install pandas-ta

Common Mistakes

āœ—Confusing with MACD signals
āœ—Not understanding percentage nature

Confirmation Signals

Price action
Volume
RSI

Best For

Comparing momentum across assetsMACD alternativeDivergence trading

šŸ’” Pro Tips

  • ā€¢Percentage-based unlike MACD
  • ā€¢Better for comparing different price securities
  • ā€¢Signals same as MACD
Last updated: December 29, 2024

Educational Disclaimer

This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.

Learn More

Investopedia - Technical IndicatorsBabyPips - Technical IndicatorsMetaTrader 5 Docs

Frequently Asked Questions

Related Indicators

MACD (Moving Average Convergence Divergence)

MACD shows the relationship between two EMAs. Consists of MACD line, signal line, and histogram.

Relative Strength Index (RSI)

RSI measures the speed and magnitude of price changes, oscillating between 0-100 to identify overbought and oversold conditions.

Rate of Change (ROC)

Measures the percentage change in price over a specified period.

Back to All Indicators