Pretty Good Oscillator for Excel
The trading system itself is shockingly rudimentary. There’s an oscillator (the so called Pretty Good Oscillator) that swings above and below zero. When the oscillator swings above +3.0, that’s a BUY signal. When it retreats below 0.0, that’s an EXITLONG signal. When the oscillator swings below -3.0, that’s a SELLSHORT signal. And when it advances above 0.0, that’s an EXITSHORT signal. It’s pretty simple.
To break the PGO code down. Within it there is a moving
average which has a lookback of the sum of a few fib.
When price = the moving average, PGO = 0. and when
PGO = 0 you exit. THUS, the moving average is your
The PGO value is equal to the number of ATR’s between the close and the moving
avg. So if PGO=2.5, then the close is = MA+2.5*ATR.
All PGO is doing is saying “if the close is >= 2 ATR’s
above the average then buy.
I have just started to play with the PGO and when applied to Tbonds and Yen, it works great. Of course the rate of return is dependent on the position size used.