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Percentage Price Oscillator (PPO)
Percentage Price Oscillator (PPO) is a very close negibour of MACD indicator. PPO standard settings are similar to MACD settings: 12, 26, 9, and PPO, same as MACD shows the difference between the two Moving averages, with one difference, that PPO shows it in percents. Trading with PPO is similar to trading with MACD indicator, with the same zero line crossover rules, divergence etc.
Reasons for using PPO instead of MACD
By having the percentage measurement rather than price values (for example PPO = 3%), it becomes possible to compare currency pairs with their rising/falling % against each other, regardless the actual prices. - PPO also offers a better interpretation of the two moving averages in relation to each other. Again, this absolute percentage value allows to make comparisons across time frames, regardless the market price.
//+------------------------------------------------------------------+ //| PPO.mq4 | //| Copyright © 2007 Tom Balfe | //| | //| Percentage Price Oscillator | //| This is a momentum indicator. | //| Signal line is EMA of PPO. | //| | //| Follows formula: (FastEMA-SlowEMA)/SlowEMA | //+------------------------------------------------------------------+ #property copyright "Copyright © 2007 Tom Balfe" #property link "redcarsarasota@yahoo.com" //---- #property indicator_separate_window #property indicator_buffers 2 //---- #property indicator_color1 SkyBlue #property indicator_color2 Red #property indicator_width1 2 #property indicator_width2 1 #property indicator_style2 2 //---- user changeable stuff extern int FastEMA=12; extern int SlowEMA=26; extern int SignalEMA=9; //---- two buffers double PPOBuffer[]; double SignalBuffer[]; //+------------------------------------------------------------------+ //| | //+------------------------------------------------------------------+ int init() { SetIndexStyle(0,DRAW_LINE); SetIndexStyle(1,DRAW_LINE); SetIndexDrawBegin(1,SignalEMA); IndicatorDigits(Digits+1); SetIndexBuffer(0,PPOBuffer); SetIndexBuffer(1,SignalBuffer); //---- IndicatorShortName("PPO ("+FastEMA+","+SlowEMA+","+SignalEMA+")"); SetIndexLabel(0,"PPO"); SetIndexLabel(1,"Signal"); //---- return(0); } //+------------------------------------------------------------------+ //| | //+------------------------------------------------------------------+ int start() { int limit; int counted_bars=IndicatorCounted(); //---- last counted bar will be recounted if(counted_bars>0) counted_bars--; limit=Bars-counted_bars; //---- (FastEMA-SlowEMA)/SlowEMA //---- PPO counted in the 1st buffer for(int i=0; i<limit; i++) PPOBuffer[i]=(iMA(NULL,0,FastEMA,0,MODE_EMA,PRICE_CLOSE,i)-iMA(NULL,0,SlowEMA,0,MODE_EMA,PRICE_CLOSE,i))/ iMA(NULL,0,SlowEMA,0,MODE_EMA,PRICE_CLOSE,i); //---- signal line counted in the 2nd buffer for(i=0; i<limit; i++) SignalBuffer[i]=iMAOnArray(PPOBuffer,Bars,SignalEMA,0,MODE_EMA,i); return(0); } //+------------------------------------------------------------------+
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