Percentage Price Oscillator Extended Indicator For MT5
The Percentage Price Oscillator Extended Indicator For MT5 is a momentum oscillator. The calculation is based on the values of two moving averages and the distance between them. The bigger the distance between the two moving average the more momentum is in the price movement. You can use this information for trend continuation trades as well as for reversal trades.
The Percentage Price Oscillator Extended Indicator For MT5 shows the dynamic relationship between two moving averages. The indicator which evaluates the key difference between two moving average helps the traders to identify the market momentum with accuracy.
The Percentage Price Oscillator Extended Indicator is often called as the PPO indicator. With the help of the PPO indicator, you can also determine the Moving Average Convergence and Divergence. In short, it evaluates the MACD value of the trading instrument. By seeing these complex terms, the rookies might be thinking it’s a very hard indicator to use.
It’s true the function of this Percentage Price Oscillator Extended indicator slightly differs from your regular indicator but with the help of this article, you can master the use of this indicator. But remember, no indicator is perfect. Every trader should be cautious about the risk factor or else it will be really hard to overcome the big losses. Now let’s see what kind of trading strategy will suit the PPO extended indicator.
Trading ideas with the Percentage Price Oscillator Extended Indicator For MT5
Speaking about the oscillator, we have to be aware of the false-positive signals. This means the indicator might stay in the overbought or oversold region for a prolonged period instead of reversing its direction.
But the Percentage Price Oscillator Extended indicator doesn’t have such issues. You can easily integrate this indicator with a medium or long-term trading strategy without having any major issues. Those who are looking to take trades in the stock market can gain a significant advantage by using this classic indicator. But don’t be biased and try to look for the trade setup based on the indicator reading.
Ignoring the raw price movement is a major mistake and you won’t be able to survive at trading. So, use your existing trading method to find the buying and selling signal. Once you find the perfect trade setup, you have to get back to the PPO extended indicator to analyze the quality of the signal.
Percentage Price Oscillator Extended Indicator For MT5 - Buy Entries
Everyone is concerned about making big profits. But having such a tendency in mind will never help you to earn more. You have to keep in mind investment business requires a strategic approach to trade. Use your existing trading rules to get the desired long trade setups. The trade setups must be formed at the important support level.
As you find the trade setup, you have to analyze the Percentage Price Oscillator Extended Indicator data. The cloud-like the signal line in the PPO indicator should cross above the 0 lines. The key signal line will change its color from red to blue. The cloud color will also become blue when the shift in the price momentum take place.
Once you have such a confirmation from the Percentage Price Oscillator Extended indicator, you can take the long trade. But don’t increase the risk just because you are using on the top class indicator in the Forex market. The main purpose of using this indicator is to filter the trades, not to increase the risk. And try to analyze the risk to reward ratio in the trades.
If it is 1:1 or less than that, you mustn’t take the trade. The minimum risk to reward ratio for such a trade setup should be 1:2 or else ignore the trade.
Percentage Price Oscillator Extended Indicator For MT5 - Sell Entries
Now you know the importance of risk to reward ratio while using this Percentage Price Oscillator Extended indicator. For the sell trade, you have to find a strong resistance level. To avoid the minor resistance level, you can avoid analyzing the minute time frame. Analyze the H1, H4, or the D1 time frame only.
With the help of the highs and lows, find your desired supply zone. As the price test the supply zone, you should see a strong rejection. The rejection will form a bearish candlestick pattern and the investors can take their trade at that level. But we will be waiting for the confirmation from the Percentage Price oscillator extended indicator.
The signal line will turn in the red and the cloud color in the PPO indicator will change to brown. As the cloud color in the PPO indicator changes to brow, you need to analyze the news factors. It’s not a must but studying the news factor will give you a decent idea to take the short trades at the most complicated times. You will get the confidence to trade the major news without taking a high risk.
Once you have determined the news data is in your favor, take a 2% risk and open the short order. But if you find it hard to analyze the news, avoid taking the trades during the news hours. Study the different trading sessions and news timing so that you can find out the safe path in the trading business.
Percentage Price Oscillator Extended Indicator For MT5 - Conclusion
The performance of your existing trading strategy can be boosted significantly with the help of the Percentage Price oscillator. But don’t consider the PPO extended indicator as the main tool to find the trade.
Forget about the indicator before you have spotted the trend. Once you have spotted the trend, it’s time to analyze the risk to reward ratio. After that, you should evaluate the risk factor. Once you have analyzed all the safety steps, it’s time to have a look at the PPO indicator. Remember, the reference line plays a key role in the creating of trade signals.
Look for the blue color line and navy blue cloud in the indicator during the long trade. And for the short trade, look for the red color line and brown color cloud. After you have taken the confirmation from the PPO indicator, you will slowly feel the improvement in your executions. If possible, integrate your trading method with the PA system.
People who are using the PPO extended indicator with the price action trading method tends to boost their win rate over 10% within a month. So, you must give a try to enhance your trade execution skills.