Pretty Good Oscillator (PGO) Indicator Explained

Mark Johnson's Pretty Good Oscillator (PGO) measures how far price sits from its SMA — in ATR units. A PGO of +3 means price is three average-true-ranges above its mean, a statement equally meaningful on any symbol or timeframe.

How It Works

• (Close − SMA(N)) ÷ ATR-style average range over N.
• Output is a stretch score in volatility units.
• ±3 marks a genuinely unusual extension on most markets.

How to Trade It

Johnson's original use was breakout entry: go long above +3, short below −3, treating extreme stretch as escape velocity rather than exhaustion. The mirror strategy — fading ±3 in confirmed ranges — also works; your regime filter decides which game you're playing.

Building It in Setup.Cash

Add Pretty Good Oscillator (PGO) in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. Compare with Z-Score, the standard-deviation flavored stretch measure. For the full category overview, see the advanced momentum library guide.

Momentum signals are timing tools — combine them with a trend or regime filter and backtest the exact rules before going live.