OPEN-SOURCE SCRIPT
Log Return Price Change Tanh Oscillator
Price Acceleration Oscillator (Normalized) — Detailed Description
Price Acceleration Oscillator (PAO) is a normalized momentum–acceleration indicator designed to measure how fast price is speeding up or slowing down, rather than simply whether it is going up or down.
Unlike traditional momentum oscillators that react mainly to price direction, PAO focuses on changes in momentum dynamics, making it especially useful for identifying early acceleration, deceleration, and momentum exhaustion phases.
Core Concept
PAO decomposes price movement into two components:
Velocity – the smoothed rate of price change
Acceleration – the change in velocity (momentum increase or decrease)
These components are statistically normalized and blended into a bounded oscillator, allowing consistent interpretation across different assets, timeframes, and volatility regimes.
Calculation Logic (High-Level)
Log Return (Scale-Invariant)
Uses N-bar logarithmic returns instead of raw price changes
Ensures consistency across instruments with different price levels
Velocity
Exponential moving average of log returns
Represents smoothed price speed
Acceleration
First difference of velocity
Measures whether momentum is increasing or fading
Statistical Normalization
Velocity and acceleration are independently normalized using rolling standard deviation
Converts both into dimensionless z-score–like measures
Weighted Blending
User-defined weighting between velocity and acceleration
Allows emphasizing trend persistence or momentum change
Nonlinear Compression (tanh)
Hyperbolic tangent transformation bounds the oscillator to ±100
Prevents extreme spikes while preserving structure
Dead Zone Filtering
Small values near zero are suppressed
Reduces noise and visual clutter in low-momentum conditions
Oscillator Interpretation
Above 0 → Bullish acceleration
Below 0 → Bearish acceleration
Key Zones
±25 → Early acceleration / deceleration
±50 → Strong momentum expansion
±80 → Extreme acceleration (potential exhaustion zones)
The oscillator measures momentum intensity, not trend direction alone.
Signal Line & Histogram
A smoothed EMA signal line is included for:
Momentum confirmation
Acceleration / deceleration transitions
Histogram shows the spread between oscillator and signal, highlighting momentum shifts and convergence/divergence behavior.
Background Regime Coloring
Optional background shading reflects acceleration strength:
Light colors → weak / early momentum
Darker colors → strong or extreme acceleration
This provides fast visual context without relying on signals.
Live Statistics Dashboard
The built-in table displays:
Current market state (Bullish / Bearish)
Momentum strength classification
Oscillator value and intensity
Signal spread and momentum bias
Return measurement context
Designed for decision support, not automated trade execution.
Alerts
Optional alerts are available for:
Zero-line acceleration shifts
Strong acceleration thresholds
Oscillator / signal crossings
Alerts reflect momentum state changes, not buy/sell instructions.
Intended Use
PAO is best used to:
Detect early momentum expansion or loss
Filter low-quality trades during choppy conditions
Complement trend-following or mean-reversion systems
Analyze market regime behavior rather than price direction alone
This indicator is not a standalone trading system and should be used in conjunction with broader market context, risk management, and confirmation tools.
Price Acceleration Oscillator (PAO) is a normalized momentum–acceleration indicator designed to measure how fast price is speeding up or slowing down, rather than simply whether it is going up or down.
Unlike traditional momentum oscillators that react mainly to price direction, PAO focuses on changes in momentum dynamics, making it especially useful for identifying early acceleration, deceleration, and momentum exhaustion phases.
Core Concept
PAO decomposes price movement into two components:
Velocity – the smoothed rate of price change
Acceleration – the change in velocity (momentum increase or decrease)
These components are statistically normalized and blended into a bounded oscillator, allowing consistent interpretation across different assets, timeframes, and volatility regimes.
Calculation Logic (High-Level)
Log Return (Scale-Invariant)
Uses N-bar logarithmic returns instead of raw price changes
Ensures consistency across instruments with different price levels
Velocity
Exponential moving average of log returns
Represents smoothed price speed
Acceleration
First difference of velocity
Measures whether momentum is increasing or fading
Statistical Normalization
Velocity and acceleration are independently normalized using rolling standard deviation
Converts both into dimensionless z-score–like measures
Weighted Blending
User-defined weighting between velocity and acceleration
Allows emphasizing trend persistence or momentum change
Nonlinear Compression (tanh)
Hyperbolic tangent transformation bounds the oscillator to ±100
Prevents extreme spikes while preserving structure
Dead Zone Filtering
Small values near zero are suppressed
Reduces noise and visual clutter in low-momentum conditions
Oscillator Interpretation
Above 0 → Bullish acceleration
Below 0 → Bearish acceleration
Key Zones
±25 → Early acceleration / deceleration
±50 → Strong momentum expansion
±80 → Extreme acceleration (potential exhaustion zones)
The oscillator measures momentum intensity, not trend direction alone.
Signal Line & Histogram
A smoothed EMA signal line is included for:
Momentum confirmation
Acceleration / deceleration transitions
Histogram shows the spread between oscillator and signal, highlighting momentum shifts and convergence/divergence behavior.
Background Regime Coloring
Optional background shading reflects acceleration strength:
Light colors → weak / early momentum
Darker colors → strong or extreme acceleration
This provides fast visual context without relying on signals.
Live Statistics Dashboard
The built-in table displays:
Current market state (Bullish / Bearish)
Momentum strength classification
Oscillator value and intensity
Signal spread and momentum bias
Return measurement context
Designed for decision support, not automated trade execution.
Alerts
Optional alerts are available for:
Zero-line acceleration shifts
Strong acceleration thresholds
Oscillator / signal crossings
Alerts reflect momentum state changes, not buy/sell instructions.
Intended Use
PAO is best used to:
Detect early momentum expansion or loss
Filter low-quality trades during choppy conditions
Complement trend-following or mean-reversion systems
Analyze market regime behavior rather than price direction alone
This indicator is not a standalone trading system and should be used in conjunction with broader market context, risk management, and confirmation tools.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For help and support, feel free to contact:
wa.me/905469061306
wa.me/905469061306
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For help and support, feel free to contact:
wa.me/905469061306
wa.me/905469061306
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.