PPO (Percentage Price Oscillator)

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.

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.

• 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)

Buy signals

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

Sell signals

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

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

| 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 |

• 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