Author: Tom Balfe
The Percentage Price Oscillator (PPO) is a valuable tool for traders, calculated by taking the difference between the short-term and long-term Exponential Moving Averages (EMAs). This result is then divided by the short EMA to give you a clearer picture of market momentum.
Why Use the PPO?
- The PPO provides more accurate signals for spotting divergences between price movements and oscillator values.
- It highlights price extremes more effectively and responds more quickly to market changes.
The formula for calculating the PPO is straightforward: (FastEMA - SlowEMA) / SlowEMA
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