Percentage is a variation of the indicator. Signal line crossovers are almost identical. The major difference is the Percentage scale which enables comparison between stocks at different prices.
Percentage Price Oscillator's trading signals are the same as for the indicator. The indicator is primarily used to trade trends and should not be used in a ranging market. Signals are taken when crosses its signal line, calculated as a 9 day of .
First check whether price is trending. If the indicator is flat or stays close to the zero line, the market is ranging and signals are unreliable.
Signals are far stronger if there is either:
- a divergence on the indicator; or
- a large swing above or below the zero line.
- Unless there is a divergence, do not go long if the signal is above the zero line, nor go short if the signal is below zero. Place stop-losses below the last minor Low when long, or the last minor High when short.
The main advantage of Percentage over is the ability to compare indicator values across stocks.
The only difference with Percentage is that the difference between the fast and slow moving averages is calculated as a percentage of the slow moving average: = (12 Day - 26 Day ) / 26 Day