Percentage Price Oscillator for Divergence and Price Extremes

Summary

The Percentage Price Oscillator (PPO) compares a fast moving average with a slow moving average, expressing their difference relative to the slow average. The document describes the result as a non-normalized oscillator and notes that it includes a signal line, allowing it to be used in a manner similar to a stochastic oscillator.

The author claims the indicator makes divergence between price and oscillator values clearer, identifies price extremes more accurately, and responds more dynamically to price movement. These are stated claims; the document provides no charts, test results, parameter settings, or comparison data to evaluate them. It also mentions an earlier implementation and a supporting software library, but gives no trading rules or evidence that the indicator produces profitable signals. Traders should treat the claimed advantages as unverified and assess the indicator with their own data and methodology.

Key ideas

• The PPO measures the fast and slow moving average spread as a proportion of the slow average.
• A signal line is included, enabling oscillator-style signal comparisons.
• The author says it may help reveal divergence and price extremes, but supplies no supporting performance evidence.
• The document gives no parameter choices or complete trading strategy.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.