- Shows the relationship between two moving averages in percentage terms. The moving averages are a 26-period and 12-period exponential moving average.
- The PPO typically contains two lines: the PPO line, and the signal line. The signal line is an EMA of the PPO, so it moves slower than the PPO.
- The PPO crossing the signal line is used by some traders as a trade signal. When it crosses above from below that is a buy, and when it crosses below from above that is a sell.
- When the PPO is above zero that helps indicate an uptrend, as the short-term EMA is above the longer-term EMA.
- When the PPO is below zero, the short-term average is below the longer-term average, which helps indicate a downtrend.
