Question 1

What is PPO?

Accepted Answer

The Percentage Price Oscillator (PPO) is a momentum indicator that shows the relationship between two moving averages as a percentage. It is essentially MACD expressed as a percentage of the longer moving average, making it easier to compare across different securities regardless of price level.

Question 2

How it works

Accepted Answer

PPO calculates the percentage difference between a fast and slow EMA: ``` PPO = ((EMA(fast) - EMA(slow)) / EMA(slow)) * 100 Signal = EMA(PPO, signal_period) Histogram = PPO - Signal ``` Sub-components: `PPO_SIGNAL`, `PPO_HISTOGRAM`.

Question 3

Key features

Accepted Answer

- **Above 0** — Fast EMA is above slow EMA (bullish momentum) - **Below 0** — Fast EMA is below slow EMA (bearish momentum) - **Signal line crossover** — PPO crossing its signal line - **Histogram** — Difference between PPO and signal (momentum acceleration)

Question 4

Buy signals

Accepted Answer

- PPO crosses above the signal line (bullish crossover) - PPO crosses above 0 (bullish momentum confirmed) - PPO histogram turns from negative to positive

Question 5

Sell signals

Accepted Answer

- PPO crosses below the signal line (bearish crossover) - PPO crosses below 0 (bearish momentum confirmed) - PPO histogram turns from positive to negative

Question 6

Parameters

Accepted Answer

| Parameter | Default | Description | |-----------|---------|-------------| | Fast Period | 12 | Fast EMA period | | Slow Period | 26 | Slow EMA period | | Signal Period | 9 | Signal line EMA period |

Question 7

Example conditions

Accepted Answer

| Condition | Meaning | |-----------|---------| | `PPO(12,26,9) > 0` | Bullish momentum | | `PPO(12,26,9) cross_over PPO_SIGNAL(12,26,9)` | Bullish signal crossover | | `PPO_HISTOGRAM(12,26,9) > 0` | Positive momentum acceleration | | `PPO(12,26,9) cross_under 0` | Momentum shift to bearish |

Question 8

Tips

Accepted Answer

- PPO is better than MACD for comparing momentum across different assets - The percentage format normalizes the indicator regardless of price level - Signal line crossovers are the most common trading trigger - Divergence between PPO and price can forecast reversals - Use the histogram to gauge the strength of the momentum shift