Define: Percentage Price Oscillator

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Definition: Percentage Price Oscillator



What is the dictionary definition of Percentage Price Oscillator?

Dictionary Definition


The Percentage Price Oscillator (PPO) is a technical momentum indicator that measures the difference between two moving averages as a percentage of the slower moving average. The Percentage Price Oscillator is very similar to MACD in terms of calculation, display and application.


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Full Definition of Percentage Price Oscillator


The Percentage Price Oscillator (PPO) is a technical momentum indicator that measures the difference between two moving averages as a percentage of the slower moving average.

The Percentage Price Oscillator is very similar to MACD in terms of calculation, display and application. Whereas the MACD measures an absolute difference, the Percentage Price Oscillator is normalized to produce a relative value.  This makes it possible to compare different securities with the PPO, even with large differences in price.

Percentage Price Oscillator Formula

The Percentage Price Oscillator is calculated by subtracting the 26-day exponential moving average (EMA) from the twelve-day EMA. The difference is turned into a percentage by dividing by the 26-day EMA and multiplying by 100. The end result is a percentage that tells the trader where the short-term average is relative to the longer-term average.

  1. PPO = ( ( EMA12 {Close} – EMA26 {Close} ) / EMA26 {Close} ) x 100
  2. PPOSL = EMA9 {PPO}
  3. PPOHG = PPO – PPOSL

where:

An Interpretation of the Percentage Price Oscillator is similar to the MACD. Whereas the MACD measures an absolute difference, the Percentage Price Oscillator is normalized to produce a relative value.  This makes it possible to compare different securities with the indicator, even with large differences in price. When the PPO crosses above the signal line the stock price is bullish. Similarly, when the PPO crosses below the signal line the stock price is bearish. The PPO histogram can be used to anticipate signal line / PPO crossovers.

When the Percentage Price Oscillator crosses above the signal line the stock price is bullish. Similarly, when the oscillator crosses below the signal line the stock price is bearish. The histogram can be used to anticipate signal line crossovers.


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Synonyms For Percentage Price Oscillator


PPO


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Definition Sources


Definitions for Percentage Price Oscillator are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd March, 2020