List of Financial Market Terms

A percent price oscillator (PPO) is used as a momentum indicator that displays two moving averages and their relationship with each other. 

The PPO is calculated by subtracting the 26 day exponential moving average from the 9 day exponential moving average, and then dividing the difference by the 26 day EMA. This tells a Trader in day trading, stock trading, options trading, and futures trading a short term percentage that is relative to a longer-term average.

This is similar to MACD being that it's a momentum indicator that utilizes moving averages.  That said, the analytical use differs.  Basically, if there is a PPO reading of 3.5, it indicates the short term average is 3.5% above the long term average.

Calculated PPO equation:

Percentage Price Oscillator (PPO)


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