Price oscillator

What is price momentum oscillator?

Price oscillator

Price oscillator is momentum oscillator in technical analysis. Price oscillator also called percentage price oscillator (PPO), A measurement of momentum based on the trend between two separate exponential moving averages. This is used in conjunction with MACD to assign a percentage value to monitor convergence and divergence. It requires a calculation of the net difference in the 12 day and 26 day EMA, dividing by the longer average and then multiplying the result by hundred to arrive at the percentage value.

How to write price oscillator formula?

Formula for the price Oscillator: 
[(12ᵐᵃ - 26ᵐᵃ)/26ᵐᵃ]x 100= PO
where: 12ᵐᵃ =12 day EMA
              26ᵐᵃ =26 day EMA
PO= price oscillator

How price oscillator is useful?

The price of oscillator is useful in employing an MACD to identify buy and sell signals. The indications are similar to MACD, but expressed as percentage is above or below the signal line (a 9 day EMA of the price oscillator.)
the price oscillator is a valuable confirmation tool for what candlestick reversal indicator signal. Like MACD this is a track of moving averages, so it is backward looking. Any large moves in price may distort the price oscillator, meaning that before acting on a buy or sell signal korma traders using the price oscillator need independent confirmation from candlestick pattern in agreement or from Western technical guides. 

Post a comment