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Pretty Good Oscillator: How to Spot Market Momentum Shifts in TradingView

· 4 min read
Pineify Team
Pineify Team

The Pretty Good Oscillator (PGO) is like a speedometer for the market. It shows when prices might be moving too fast in one direction and could be due for a pause or reversal. It compares current prices to an average, then adjusts for how volatile the market's been. Think of it as a cousin to other momentum tools like the Elliott Wave Oscillator or RSI divergence patterns - they all help spot when markets might be running out of steam.

Pretty Good Oscillator example on a chart

What the PGO Actually Does​

Some smart trader named Mark Johnson came up with this. It basically answers two questions:

  1. How far is price from its average?
  2. How wild has the market been moving lately?

It gives you a number that moves around zero - positive means upward pressure, negative means downward pressure. Most of the time it hangs out between -3 and +3. When it pushes past these levels, that's when things get interesting.

Why it's useful:

  • Doesn't jump around too much
  • Works on any chart timeframe
  • Helps spot potential turning points
  • Adjusts automatically for market craziness

About Pineify​

Pineify Website

Pineify is like having a shortcut for TradingView indicators. Instead of writing code from scratch, you can grab ready-made tools and tweak them to fit how you trade. It's especially handy if you want to test ideas before putting real money on the line.

Putting the PGO on Your Chart​

Adding the PGO indicator in Pineify

Here's how to get started:

  1. Open Pineify's editor
  2. Search for "Pretty Good Oscillator"
  3. Click to add it to your chart
  4. The default settings usually work fine
  5. Save your setup so you don't have to redo it

No coding required - just a few clicks and you're set.

The Best Pine Script Generator

How to Trade Using the PGO​

Here's the practical stuff:

Zero Line Crosses

  • Above zero: momentum might be shifting up
  • Below zero: momentum might be shifting down
  • Simple but effective

Extreme Moves

  • Above +3: market might be stretched too far up
  • Below -3: market might be stretched too far down
  • Doesn't mean reverse immediately, but watch closely

When Price and PGO Don't Match

  • Price makes new lows but PGO doesn't? Could be a bottom forming
  • Price makes new highs but PGO doesn't? Could be a top forming
  • These mismatches often lead to good trades - similar to how RSI divergence works, where price and indicator tell different stories.

Checking Trend Strength

  • PGO rising? Uptrend is healthy
  • PGO falling? Downtrend is strong
  • Works even better when other indicators agree - many traders find success combining PGO with MACD crossover signals for stronger confirmation.

Finding What Works For You​

Different settings for different styles:

Default Setup

  • 89 period (good middle ground)
  • +3/-3 levels
  • Solid starting point

Fast Trading

  • Try 21-34 period
  • Catches moves quicker
  • But gets more false signals

Slow Trading

  • Try 144-233 period
  • Smoother moves
  • Better for longer holds

Timeframes Matter

  • Short timeframes: shorter periods
  • Medium timeframes: middle periods
  • Long timeframes: longer periods

Testing Your Approach​

With Pineify, you can see how different PGO strategies would've played out:

Entry Ideas

  • Buy when PGO comes up from oversold
  • Sell when PGO drops from overbought
  • Or wait for those mismatches we talked about

Exit Plans

  • Take profits at certain levels
  • Use stops to limit losses
  • Move stops with winning trades

Risk Stuff

  • Size positions based on market movement
  • Know your max loss beforehand
  • Aim for trades where potential reward > risk

Testing helps you see what actually works before you risk real money.

Wrapping Up​

The Pretty Good Oscillator is straightforward but surprisingly useful. It gives you a clean read on momentum while accounting for market volatility. And with Pineify, you can get it on your charts in seconds.

Just remember - no tool works perfectly all the time. Use it as part of your overall approach, keep risk in check, and combine it with other things you're watching. If you're just getting started with custom indicators, our Pine Script tutorial for beginners can help you understand how to tweak and optimize these tools for your specific trading style.

Happy trading!