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The Percentage Price Oscillator (PPO) is a momentum indicator that uses percentage differences between two exponential moving averages; the 12-day EMA and the 26-day EMA. From those EMA's two lines are derived, the PPO line and the Signal line. The signal line is an EMA of the PPO line, so it will be slower than the PPO line. The Percentage Price Oscillator oscillates around a zero line.
Trade Signal:
When the PPO line crosses above the signal line it is a buy signal.
When the PPO line crosses below the signal line it is a sell signal.
Also:
When the PPO is above the zero-line that is a sign that the trend is up.
When the PPO is below the zero-line that is a sign that the trend is down.
Formula:
Percentage Price Oscillator ( PPO ) = [ ( 12-day EMA - 26-day EMA ) / 26-day EMA ] * 100
Signal Line = 9-day EMA of PPO
PPO Histogram = PPO - Signal Line
