Indicator Price Momentum Oscillator. It is based on the double-smoothed rate of change (ROC).
It has three adjustable parameters:
- Period one - primary smoothing period
- Period two - secondary smoothing period
- Signal period - signal line smoothing period
Calculations:
PMO = Smoothing2
Signal = AvgPMO
where:
Smoothing1 = (Raw1 - PrevSmoothing1) * sm1+PrevSmoothing1
Smoothing2 = (Raw2 - PrevSmoothing2) * sm2+PrevSmoothing2
Raw1 = (((Close / PrevClose) * 100.0) - 100.0)
Raw2 = 10.0 * Smoothing1
sm1 =2.0/Period one
sm2 = 2.0/Period two
AvgPMO = EMA(PMO, Signal period)
