Percentage Price Oscillator (PPO) Forex Strategy

The Percentage Price Oscillator (PPO) forex strategy is a strategy that uses the wit of the PPO custom indicator to gauge the difference between two moving averages.

In the form of a percentage of the bigger moving average, while also relying on the 3c_Turbo_JRSX custom indicator to deliver buy and sell signals.

Chart Setup

MetaTrader4 Indicators: 3c_Turbo_JRSX.ex4 (default setting), PPO.ex4 (default setting)

Preferred Time Frame(s): Any

Recommended Trading Sessions: Any

Currency Pairs: Any

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a buy in the market if the following conditions or rules holds true:

  1. If the shorter moving average (SkyBlue line) is above the longer moving average (dotted red line) and heads upwards, it denotes a bullish signal, but even so when the PPO is positive it strengthens our existing bullish trend.

The PPO moves into positive territory as the shorter moving average distance itself from the longer moving average.

  1. If the grey line of the 3c_Turbo_JRSX custom indicator breaks above the 30.00 level, it is a signal that price is heading bullish.

Also consider if the line of the 3c_Turbo_JRSX crossed from below the 30.00 level (usually seen as an oversold region), it is most likely for price to be bullish under such circumstances.

Stop Loss for Buy Entry: Place stop loss below support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit on position(s) if the following chart or indicator pattern are in display:

  1. If the shorter moving average (SkyBlue line) crosses the longer moving average (dotted red line) downwards, it is a signal of an impending reversal.
  2. If the line of the 3c_Turbo_JRSX custom indicator breaks above the 70.00 level, it is a signal that price is overbought. However, when it begins to decline and break below 70.00 level an exit or take profit is advised.

Sell Entry Rules

Enter a sell in the market if the following conditions hold sway:

  1. If the shorter moving average (SkyBlue line) is below the longer moving average (dotted red line) and heads downwards, it is a sign that price is being pushed to the down side.

Howbeit, a negative PPO strengthens our existing bullish trend. The PPO dips into negative territory as the shorter moving average distance itself from the longer moving average on its way down.

  1. If the grey line of the 3c_Turbo_JRSX custom indicator breaks below the 70.00 level, it is an indication of a bearish trend. More so, if the line of the 3c_Turbo_JRSX crossed from above the 70.00 area (usually seen as an overbought region), the odds are high for a bearish signal.

Stop Loss for Sell Entry: Place stop loss above resistance.

Exit Strategy/Take Profit for Sell Entry:

Exit or take profit on position(s) if the following chart or indicator patterns develop:

  1. If the shorter moving average (SkyBlue line) crosses the longer moving average (dotted red line) upwards, it is a signal to exit or take profit.
  2. If the line of the 3c_Turbo_JRSX custom indicator breaks below the 30.00 level, it is a signal that price is oversold. However, when it begins makes a U-turn and break above the 30.00 level an exit or take profit is advised.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The Percentage Price Oscillator (PPO) is a momentum indicator that gauges the difference between two moving averages as a percentage of the bigger moving average.

The PPO has its standard settings that are similar to those of the MACD: 12, 26, 9.

The 3c_Turbo_JRSX is a momentum oscillator that defines price within oversold (below the 30 level) and overbought (beyond the 70 level) zones in the market.

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