What is Price Oscillator?
The Price Oscillator takes the same gap as MACD, a fast exponential average minus a slow one, and divides it by the slow average, so the result is a percentage. A reading of 2 means the fast average is 2 percent above the slow one. It is drawn as a single line in its own pane with a dashed zero line.
The percentage makes its size comparable across markets and across time on one market whose price has changed a lot. It has no signal line or histogram, and it does not predict future prices.
How to use Price Oscillator
- Above or below zero. Above zero, the fast average is above the slow one, read as an uptrend. Below zero, the reverse.
- Crossing zero. The line crosses zero on the same bar the two averages cross.
- Size of the reading. The further from zero, the more stretched the fast average is from the slow one, in percent. Comparing those values across markets is what the percentage is for.
- The slope. A rising line means the gap is widening upwards or narrowing from below.
These are ways to read the line, not entry signals on their own.
Settings
| Setting | Default | What it changes |
|---|---|---|
| Short Length | 10 | Bars in the fast exponential average. Lower reacts sooner and is noisier. Minimum 1. |
| Long Length | 21 | Bars in the slow exponential average, which is also the denominator. Higher widens the gap and slows the line. Minimum 1. |
| Source | Close | Which price both averages are taken from. Open, high, low and the averaged sources such as hl2 and hlc3 are also available. |
Adjust the two lengths and the price source in the indicator settings.
Calculation
The gap between the two averages is divided by the slower one:
fast = EMA(price, 10)
slow = EMA(price, 21)
Price Oscillator = 100 * (fast - slow) / slowThe denominator is the slow average, not the price and not the fast average. Zero crossings happen on exactly the same bars as a MACD with the same two lengths; only the scale differs.
Each exponential average is started from the simple average of its first values. The slow average has its first value on bar 20 counting from 0, which is where the line starts.
Limitations
- It lags. It is built from two averages of past prices, so zero crossings follow the move.
- Sideways markets produce repeated crossings. When price ranges, the two averages tangle and the line crosses zero again and again.
- It has no signal line. Unlike MACD, there is no built-in average of the line to cross, so turns must be judged from the line itself.
- The live candle moves. The current bar's value changes until that bar closes.
- It is not a strategy. On its own it carries no risk management, sizing or exit.
Frequently asked questions
The Price Oscillator is the difference between a 10-bar and a 21-bar exponential average of price, divided by the 21-bar average and multiplied by 100. It shows the gap between the two averages as a percentage, in a separate pane with a zero line.
Both are built on the gap between a fast and a slow exponential average, and both cross zero on the same bars when the lengths match. MACD reports the gap in price units and adds a signal line and histogram. The Price Oscillator reports it as a percentage of the slow average, with a single line, and uses default lengths of 10 and 21 rather than 12 and 26.
Yes. The indicator declares three inputs: Short Length, default 10; Long Length, default 21, each with a minimum of 1; and Source, default close. Open the indicator's settings on the chart to change them.
Values on bars that have already closed are not revised. The current candle's value moves while that candle is live and settles when it closes. Because the exponential averages need a starting point, scrolling back to load older history recalculates them and values near the very start of the loaded range can shift.
Use the Add to chart button at the top of this page. It opens BTC/USDT on Binance in the Altrady Charts terminal with the built-in Price Oscillator already applied. On any other market, open the indicator picker on the chart and choose Price Oscillator from the Momentum group.