Price Oscillator

The Price Oscillator calculates the difference between two exponential moving averages, with the long-period average being subtracted from the short-period average. This difference is expressed as a percentage of the short-period average.

The Price Oscillator is comparable to the MACD, the difference being that the MACD always expresses the difference in monetary units.

Example

Interpretation

Typically, the use of moving averages generates buy signals when a short-term moving average rises above a longer-term moving average. Conversely, sell signals are produced when a shorter-term moving average falls below a longer-term moving average.

The Price Oscillator illustrates the cyclic and often profitable signals produced by this moving average system.