Indicator for Binary Options PPO

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PPO

The PPO (Percent Price Oscillator) binary options indicator is a MACD derived technical tool that is widely used by traders. Both indicators not only allow you to identify divergences, but potential market reversals as well. However, the key difference with PPO is that it represents a percentage ratio between two moving averages, which allows you to more accurately assess the strength of the price impulse.

In this review, we will examine in detail the operating principle of the free PPO indicator, compare it with MACD signals, and discuss how to make it a reliable assistant in making trading decisions in the binary options market.

Content:

Characteristics
Installation
Overview and Settings
PPO Trading Rules
Opening a Call Option
Opening a Put Option
Conclusion
Download PPO

indicator for binary options PPO

Binary Options PPO Indicator Characteristics

Terminal: MetaTrader 4
Timeframe: M5
Expiration: 3 candles
Option Types: Call/Put
Indicators: PPO.ex4
Trading instruments: currency pairs, commodities, cryptocurrencies, stocks
Trading hours: 8:00-20:00 Moscow time
Recommended brokers: Quotex, Pocket Option, Deriv, Binarium

Binary Options PPO Indicator Installation

The PPO indicator is installed in the MetaTrader 4 platform by default. You just need to add it to the root folder of the terminal by selecting “File” in MetaTrader 4 and then “Open data catalog”. In the opened catalog, go to the “MQL4” folder, then to “Indicators” and move all the files there. Templates are installed in a similar way, but are placed in the “templates” folder. You can learn about the installation in more detail in our video:

Review and Settings of the Binary Options Indicator PPO

The PPO binary options indicator is an interesting alternative to the standard MACD oscillator. Like the MACD, the PPO is located below the price chart, without interfering with the trader's technical analysis.

PPO vs MACD Indicator Comparison

The figure above shows the symmetry of arising signals, both on the classic MACD indicator and its user analogue — PPO. Exceeding the histogram bar of the dotted signal line MACD is accompanied by the intersection of the main and auxiliary lines PPO. When crossing from bottom to top, a potential signal to buy a Call option arises, and the reverse intersection signals a potential opportunity to buy Put options.

PPO indicator settings

Let's move on to the settings. The PPO indicator has very few of them. The user can set up the periods of the fast and slow EMA, as well as the signal line. We recommend starting with the parameters indicated in the screenshot above, and only after testing the trading signals on historical data, try to change them.

Trading Rules for the PPO Binary Options Indicator

The PPO binary options indicator is great for trend trading on a rollback. The moment of intersection of the lines of this oscillator, as a rule, coincides with the break of the short-term trend (trend on a lower timeframe).

rules for trading on the binary options indicator PPO

The picture above shows how a fairly strong price movement in the direction of the main trend arises after the intersection of the base and signal lines of the oscillator. Thus, it is enough to follow the signals of PPO indicator's lines in the direction of the trend to trade using it. And here the question arises: how to determine it?

There are many approaches, including the use of graphical analysis tools and various trend indicators. You will learn about the best of them from a selection of articles on our website:

In our case, we will use a standard indicator to determine the trend - an exponential moving average with a calculation period of 100 candles. We will open Call buying transactions only if the candles are above EMA(100) and the PPO oscillator has signaled a bottom-up crossover. To open a Put option, the candles must be below EMA(100) and the PPO must signal a top-down crossover.

Opening a Call Option

We are convinced that the market is in a bullish trend – candles are above EMA(100).
The PPO oscillator crosses the signal line from bottom to top.
At the opening of a new candle we buy a Call option.

opening a Call option on the PPO indicator

Opening a Put Option

We are convinced that the market is in a bearish trend – candles are below EMA(100).
The PPO oscillator crosses the signal line from top to bottom.
At the opening of a new candle we buy a Put option.

Opening a Put Option with the PPO Indicator

It is recommended to select the expiration time of 3 candles. We advise you to choose the holding period of positions depending on the results of testing on historical data.

Specifics of Using the Binary Options PPO Indicator

A feature of the indicator for binary options PPO is its sensitivity to the level of market volatility. During the periods of flat and price consolidation near important support and resistance levels, false trading signals are possible. Try to avoid trading during inactive market hours to minimize such situations.

Also, the article provides only one of the possible options for filtering the trend. In addition to the classic moving averages, there are many other, no less effective ways of determining the main trend in the market.

Pros of the PPO indicator

The advantages of this technical analysis tool include accurate signals for opening trades. At the same time, it does not redraw them and keeps them in the same places when switching timeframes. Simple settings and rules of use allow beginners to easily integrate this indicator into their trading strategies.

Cons of the PPO indicator

One of the main disadvantages of this tool is the lack of notification system. It would be much more convenient to work with it if the developers added alerts that could be configured for different events: crossing PPO lines from bottom to top and vice versa.

Conclusion

The PPO binary options indicator is another tool in the trader's arsenal. With its help, even beginners can increase the percentage of profitable transactions. All that is needed for its successful use is to select the appropriate trend filter and asset for trading.

Despite some limitations present in the free version of this indicator, this does not detract from its merits in finding accurate trades. And in combination with other trend analysis indicators, you can create a working trading strategy based on it. However, before using it in practice, we recommend practicing on a demo account with a reliable binary options broker. Trade, observing the rules of risk and capital management. We wish everyone successful trading!