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technical_indicators:price_oscillators_ppo [2023/07/26 14:47] jayanthi [Introduction] |
technical_indicators:price_oscillators_ppo [2023/07/26 14:48] jayanthi [Calculation] |
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| First, PPO readings are not subject to the price level of the security. Second, PPO readings for different securities can be compared, even when there are large differences in the price. See the [[:technical_indicators:moving_average_convergence_divergence_macd|ChartSchool article on MACD]] for information on signals common to MACD and PPO. | First, PPO readings are not subject to the price level of the security. Second, PPO readings for different securities can be compared, even when there are large differences in the price. See the [[:technical_indicators:moving_average_convergence_divergence_macd|ChartSchool article on MACD]] for information on signals common to MACD and PPO. | ||
| - | ===== Calculation ===== | + | ===== How Do You Calculate the Percentage Price Oscillator? ===== |
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| - | While MACD measures the absolute difference between two [[:technical_indicators:moving_averages|moving averages]], PPO makes this a relative value by dividing the difference by the slower moving average (26-day EMA). PPO is simply the MACD value divided by the longer moving average. The result is multiplied by 100 to move the decimal place two spots. The table below shows Intel (INTC) with values for the 12-day EMA, 26-day EMA, MACD and PPO. Intel is priced in the low 20s and MACD values range from -44 cents to +64 cents. PPO puts this in percentage terms with values ranging from -2.01 to +2.85. It is easier to compare levels over time with percentages. -2.01 is equivalent to -2.01%, while +2.85 is equivalent to +2.85%. | + | While MACD measures the absolute difference between two [[:technical_indicators:moving_averages|moving averages]], PPO makes this a relative value by dividing the difference by the slower moving average (26-day EMA). PPO is the MACD value divided by the longer moving average. The result is multiplied by 100 to move the decimal place two spots. The table below shows Intel (INTC) with values for the 12-day EMA, 26-day EMA, MACD and PPO. Intel is priced in the low 20s and MACD values range from -44 cents to +64 cents. PPO puts this in percentage terms with values ranging from -2.01 to +2.85. It is easier to compare levels over time with percentages. -2.01 is equivalent to -2.01%, while +2.85 is equivalent to +2.85%. |
| {{:technical_indicators:price_oscillators_ppo:ppo-1-spreadsheet.png|PPO - Spreadsheet 1}} | {{:technical_indicators:price_oscillators_ppo:ppo-1-spreadsheet.png|PPO - Spreadsheet 1}} | ||