This indicator entails a simple calculation that provides powerful insights at the same time. It combines trend and momentum components and is calculated by obtaining the difference between two EMAs.

This indicator can be used in two different ways, to pinpoint the momentum of the price or to spot divergences.

The indicator is displayed by a line oscillating around zero. When it crosses above the zero line, the fast moving average is above the slow one, suggesting that the price is gaining bullish momentum and sending a buy signal. In the same way, when the APO crosses below the zero line, the bearish pressures are dominating the price and it generates a sell signal.