Price Momentum Oscillator (PMO) on Gold

What it shows

A slow blue PMO and an orange signal curve around a grey zero mark beneath the candles. Both bend gently, since the blue one has been smoothed twice before you see it.

How Pravex works it out

Take the one-candle rate of change of the close, in percent.
Smooth it with weight 2 ÷ the first smoothing length (2 ÷ 35 at the default), started from the simple average of the first 35 values. That is a slightly heavier weight than an EMA of the same length, which uses 2 ÷ 36, so this pass reacts a little quicker.
Multiply by 10.
Smooth again with weight 2 ÷ the second smoothing length (2 ÷ 20). That is the PMO.
For the signal, the PMO gets a standard 10-candle EMA with the usual 2 ÷ (length + 1) weight.
To follow one invented value: a first-pass value of 0.05 becomes 0.5 after the multiply, and the second pass then smooths that 0.5 together with the values before it.

Settings

Setting	Default	What changing it does
First smoothing length	35	The length of the first, slower pass. A longer value makes the PMO smoother and later to turn.
Second smoothing length	20	The length of the second pass. A shorter value lets the line follow the first pass more closely.
Signal average length	10	The EMA length of the signal line. A longer value puts the orange line further behind the blue one, so crosses come later.

How traders read it

Zero splits up momentum from down momentum, and the PMO crossing it means the twice-smoothed change has flipped sign.

Blue crossing orange comes earlier than a zero cross. Because both are smooth, a cross usually follows a visible turn in the PMO and comes after the price has already moved.

With no overbought or oversold marks, judge how far the PMO is from zero against its own earlier swings on the same chart and timeframe.

When it misleads

Two slow passes make the PMO late, so it turns after the price has already turned. In a sideways range it hovers near zero and crosses its signal back and forth. It needs at least 35 values before the first reading, so it starts late on a chart. Gold has no weekend candles, so the Monday open joins Friday’s close in one step, and a gap shows up as a single large change.

Questions and answers

Is the PMO too slow for intraday gold?

At 35, 20 and 10 it is built for daily candles. On hourly gold you can halve the first two passes to about 18 and 10, which turns sooner but crosses its signal more often.

How is the PMO different from the MACD?

The MACD subtracts two moving averages of price. The PMO smooths the percent change of each close twice, so it measures momentum rather than the gap between averages.

What does a PMO cross of zero mean?

The smoothed one-candle change moved from one side of zero to the other. It is a slow signal and arrives after the turn.

Why is the PMO weight 2 divided by 35 and not 36?

Our code uses 2 ÷ length, a slightly heavier weight than the usual EMA’s 2 ÷ (length + 1), so each pass follows new values a little more closely. The signal line uses the normal EMA weight.