What does the Pretty Good Oscillator measure?

PGO measures the signed distance between the close and its simple moving average, divided by a smoothed true range. In this EMA-based version, +2 means the close is two EMA-smoothed true ranges above the SMA. It is a dimensionless distance, not a percentage return or a forecast.

Is the PGO denominator the same as ta.atr()?

No. This page uses EMA(True Range, N), matching the documented Trading Technologies PGO formula. Pine ta.atr(N) uses RMA smoothing. Substituting it changes the indicator, especially after changes in volatility. An EMA applied to an already smoothed ATR is a third calculation.

What are the best Pretty Good Oscillator settings?

There is no universal best setting. The example retains the Pineify indicator configuration of 89 bars and reference levels of +3 and -3. These are starting inputs, not measured optimal values. Compare settings on separate testing periods with the same symbol, session, timeframe and smoothing method.

Does PGO above +3 mean overbought?

PGO above +3 means price is more than three smoothed true ranges above its SMA. It can remain there during a trend. A continuation rule and a mean-reversion rule make different predictions from that observation; the reading alone does not establish either prediction.

What happens when the denominator is zero or very small?

A zero denominator makes PGO undefined. The example plots na rather than inventing a zero reading. A small positive denominator can magnify a small price deviation. The optional minimum-denominator input suppresses readings at or below a chosen number of minimum price ticks; its default of zero only excludes nonpositive values.

Does the Pine Script repaint?

The live PGO line changes while the current bar is open because close, high and low can change. The example waits for barstate.isconfirmed before marking or alerting on threshold crossings. It uses no future bars or higher-timeframe requests, but confirmation does not prevent later data revisions or make a crossing profitable.

TradingView indicator guides

Pretty Good Oscillator: price distance in true-range units

The Pretty Good Oscillator (PGO) divides the distance between the current close and its simple moving average by a smoothed true range. A value of +2 means price is two smoothed ranges above that average. This guide uses EMA smoothing for the denominator, so its result differs from a version built with Pine Script's default RMA-based ATR.

PGO = (Close - SMA(Close, N)) / EMA(True Range, N)

Example: a close of 106, SMA of 100 and smoothed range of 2 give PGO = 3. This is a distance ratio, not a 3% return.

Check the calculation Copy the Pine Script

Specify the smoothing before comparing PGO values

Trading Technologies documents an EMA of true range in its PGO formula. TradingView's default ATR uses RMA. Both average the same range input, but with different weights: EMA uses alpha = 2 / (N + 1), while RMA uses alpha = 1 / N. Applying an EMA to ATR adds another smoothing stage and does not reproduce this page's formula.

TR = max(High - Low, |High - Previous Close|, |Low - Previous Close|)

For a positive denominator, the sign comes entirely from Close - SMA. Zero means the close equals its current SMA; positive means above, and negative means below. The oscillator has no fixed upper or lower bound and does not use volume.

A four-bar calculation you can reproduce

These are synthetic prices, not a backtest. Set N = 3, so EMA alpha is 0.5. Start the EMA at the first true range of 2; with no previous close, use High - Low on that first bar. The SMA requires three closes. Values below are rounded only for display.

Synthetic three-period PGO calculation with EMA true range
Bar	High	Low	Close	TR	EMA(TR, 3)	SMA(C, 3)	PGO
1	101	99	100	2	2.0000	Not ready	Not ready
2	103	100	102	3	2.5000	Not ready	Not ready
3	105	102	104	3	2.7500	102.0000	0.7273
4	111	108	110	7	4.8750	105.3333	0.9573

On bar 4, the gap makes TR = max(3, 7, 4) = 7. The EMA becomes 0.5 × 7 + 0.5 × 2.75 = 4.875. The SMA is (102 + 104 + 110) / 3 = 105.3333, giving PGO = (110 - 105.3333) / 4.875 = 0.9573.

RMA seeded from the first three true ranges instead starts at 8/3 on bar 3 and becomes 37/9 on bar 4. Substituting that denominator gives 42/37 = 1.1351. The prices and length are identical; smoothing and initialization explain the difference.

Formula references: Trading Technologies PGO, TradingView ATR. The table is an independent arithmetic example.

Pretty Good Oscillator Pine Script v6

Paste this indicator into TradingView's Pine Editor and add it to a standard candle chart. It retains the 89-bar starting length from Pineify's PGO configuration. Change the length to 3 to follow the arithmetic above; actual chart data will have its own preceding history and EMA state.

Pine Script v6 · EMA of true range

//@version=6
indicator("Pretty Good Oscillator: EMA true range", shorttitle="PGO", overlay=false, precision=4)

length = input.int(89, "Length in bars", minval=2, maxval=500)
level = input.float(3.0, "Reference level", minval=0.1, step=0.1)
minRangeTicks = input.float(0.0, "Minimum denominator (ticks)", minval=0.0, step=0.1)

basis = ta.sma(close, length)
trueRange = ta.tr(true)
rangeEma = ta.ema(trueRange, length)
rangeFloor = minRangeTicks * syminfo.mintick
valid = not na(basis) and not na(rangeEma) and rangeEma > rangeFloor
pgo = valid ? (close - basis) / rangeEma : na

plot(pgo, "PGO (EMA true range)", color=color.blue, linewidth=2, style=plot.style_linebr)
hline(0, "Zero", color=color.gray)
hline(level, "Upper reference", color=color.red)
hline(-level, "Lower reference", color=color.red)
plot(basis, "SMA of close", display=display.data_window)
plot(rangeEma, "EMA of true range", display=display.data_window)
plot(trueRange, "True range", display=display.data_window)

crossUp = ta.crossover(pgo, level)
crossDown = ta.crossunder(pgo, -level)
confirmedUp = crossUp and barstate.isconfirmed
confirmedDown = crossDown and barstate.isconfirmed
plotshape(confirmedUp, "Confirmed upper cross", shape.triangleup, location.bottom, color.green, size=size.tiny)
plotshape(confirmedDown, "Confirmed lower cross", shape.triangledown, location.top, color.red, size=size.tiny)
alertcondition(confirmedUp, "PGO upper cross", "PGO crossed above its upper reference on a closed chart bar.")
alertcondition(confirmedDown, "PGO lower cross", "PGO crossed below its lower reference on a closed chart bar.")

Inspect the SMA, true range and denominator in the Data Window. The script uses ta.tr(true), which falls back to High - Low when the previous close is unavailable. It leaves PGO missing until the SMA is ready and when the denominator fails the minimum-range check. It does not replace missing values with zero.

The live line can move before the candle closes. Crossing markers and alert conditions wait for barstate.isconfirmed; create an alert from the indicator if you want notifications. The script places no orders and reports no strategy performance.

Test continuation and reversion as separate hypotheses

A crossing above +3 and a return below +3 are different events. Remaining above +3 for ten bars is also different from ten new crossings. PGO describes displacement; a rule determines how you act on it. The following are test specifications, not trade recommendations or validated profitable systems.

Hypothesis	Example long-side rule	Failure to inspect
Continuation	Enter after a confirmed cross above +3; exit after a confirmed cross below zero.	A gap can reverse immediately; a zero exit can return much of an open gain.
Mean reversion	Enter after a confirmed cross back above -3; exit after a confirmed cross above zero.	Price can resume its decline before reaching the average.

Before testing, specify sizing, protective exits, maximum holding time, fill timing, commission and slippage. Freeze parameters before evaluating a later period. Keep symbol, timeframe, session and price adjustments consistent. A ratio removes price units; it does not equalize signal frequency, tail risk or profitability across instruments.

Limits that change the reading

A near-zero smoothed range amplifies small deviations. For a hypothetical deviation of 0.10 and denominator of 0.01, PGO is 10. Check trading activity and tick size before treating the ratio as meaningful.
A sustained trend can keep PGO beyond a reference level. A high reading does not specify when price must reverse.
A volatility jump changes both the numerator and denominator. PGO may fall while price rises if the smoothed range expands faster than the price-to-SMA distance.
Different history lengths, smoothing seeds, sessions and synthetic chart prices can produce mismatches. Match these inputs before comparing implementations.

Educational information only, not investment advice. No threshold guarantees a profitable trade.

PGO, Momentum, ROC and ATR answer different questions

PGO measures distance from a moving average in smoothed-range units. Momentum subtracts a past price from the current price; ROC expresses that endpoint change as a percentage. ATR measures range in price units without the signed price-to-average numerator. None is interchangeable merely because its line rises.

ATR and true range Rate of Change calculation All TradingView indicator guides

Frequently asked questions

Sources and verification

Formula and platform documentation reviewed October 17, 2026. The numerical examples are synthetic; they are not performance results.

Turn a specified PGO rule into code

Pineify's Pine Script AI Coding Agent can help create and edit a script from explicit rules. Include the EMA true-range denominator, length, closed-bar conditions and exits in your request. Ask for continuation and mean-reversion versions separately, then request a syntax check and compare their chart values before testing costs and fills in TradingView.

Code generation and syntax checking do not verify profitability or automatically execute broker trades.

Explore Pine Script AI Coding Agent