Last updated: 8 October 2026. Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on EUR/USD 5-minute candles; the Chart analysis picture in Step 1 was recorded on 5 October 2026. We placed no real-money trade. The settings come from the platform’s dialog and the calculation from the published source code of the platform’s built-in indicators (Quadcode’s script library). The tested box shows what the zero-line rule and the +2/−2 levels did on EUR/USD 5-minute candles recorded between 29 September and 5 October 2026; it says nothing about what will happen next.
The Pretty Good Oscillator (PGO) measures how far the close is from its simple moving average, in units of the average true range. On IQ Option it opens in its own panel under the price chart as one line around a zero line, with two levels at +2 and −2 (the line is at +2 when the close is two ATRs above its moving average). A cross of the zero line is used as the entry and the two levels like the 70 and 30 levels of the RSI. On 5-minute EUR/USD candles the line crossed zero 163 times in 1,308 candles, about every 8 candles, and the zero-line rule did not clearly beat the break-even rate.
Quick answer
- What it plots: one line in a panel under the price chart, with a zero line and two level lines at +2 and −2.
- Formula: PGO = (close − SMA(close, n)) ÷ EMA(true range, n). The default n is 14.
- Settings on the platform: three: Period (14), Overbought (2) and Oversold (-2).
- Reading: above zero the close is above its average, below zero it is below; beyond +2 or −2 it is more than two ATRs away.
- Where: the Momentum list of the Chart analysis panel; search for Pretty Good.
- Tested: on EUR/USD 5-minute candles of 29 September to 5 October 2026 the zero-line rule gave 162 signals and won 71 of 158 decided trades at a five-minute expiry (44.9%) and 90 of 162 at fifteen minutes (55.6%); the +2/−2 level rule won 30 of 64 (46.9%) and 29 of 64 (45.3%). Break-even is 54.1% at an 85% payout; a short replay, no promise.
How do you add the Pretty Good Oscillator on IQ Option?
Set the chart
Choose the asset, the chart type and the candle size first: the indicator is calculated from the candles on the chart. The examples in this guide use 5-minute candles on EUR/USD. These steps use the web traderoom on a Practice balance, and the numbers in each screenshot match the numbers in the text. If you do not have an account yet, see how to register.
Step 1: Open Chart analysis
Click the indicators button (1), the wave icon in the chart toolbar at the bottom left of the chart. The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts. Stay on Indicators.
Step 2: Find Pretty Good Oscillator
Type “Pretty Good” in the Search for indicators box (1), or open the Momentum list, and click Pretty Good Oscillator (2).
Step 3: Check the settings
The dialog has three tabs: Basic settings (1), Colors and display and Script. The Period (2) opens at 14, the length of the moving average and of the average true range. The Overbought (3) opens at 2, the upper level line. The Oversold (4) opens at -2, the lower level line.
Step 4: Check the colours and click Apply
Open the Colors and display tab (1). The tab lists the Main line (teal by default), the Base line (the zero line, grey, with a checkbox) and the Support Lines (the two level lines, green for the upper and red for the lower, with a checkbox), and a last row with a grey colour and a line style. All the rows are in box 2. Click Apply (3).
Step 5: Read the panel
The oscillator opens in a panel under the price chart. Its title with the period, Pretty Good Oscillator (14), is at the top left of the panel (1); the teal line (2) moves around the zero line, between the two level lines at 2 and −2.
How is the Pretty Good Oscillator calculated?
The formula is PGO = (close − SMA(close, n)) ÷ EMA(true range, n), with n = 14 by default. The top is the distance between the close and its simple moving average. The bottom is an exponential moving average of the true range, which is the usual “average true range”. So the PGO says how many typical candle ranges the close is away from its average: a value of 2 means the close is two of them above the moving average, and −2 means two below it. The indicator is credited to Mark Johnson.
| Part | Default | What it does |
|---|---|---|
| Period | 14 | Length of the moving average and of the average true range |
| Overbought | 2 | The upper level line |
| Oversold | -2 | The lower level line |
The two levels are lines drawn on the panel; they do not change the calculation.
How do you read the Pretty Good Oscillator?
There are two readings. The first is the zero line: when the line crosses zero upwards, open a buy; when it crosses zero downwards, open a sell. The second is the pair of levels, used like the 70 and 30 levels of the RSI: above +2 is a stretched, overbought area and below −2 an oversold one. Divergences, where the price rises while the PGO falls, are also read as a sign that the trend may change; a divergence is a judgement made by eye on the chart and is not tested here.
Because the line is the distance from the moving average in ATR units, it is on the same scale on every asset and candle size, which is why the same ±2 levels can be used everywhere. The price of that is that it follows the moving average: it crosses zero whenever the close crosses the SMA(14).
What did it look like on 5-minute candles?
We replayed the library script on EUR/USD 5-minute candles recorded from the Practice traderoom: 1,093 candles from 29 September 2026 (01:55 UTC) to 2 October (20:55 UTC) and 241 from 4 October (21:00 UTC) to 5 October (17:00 UTC). With the default period the line has a value from the 14th candle of each stretch, 1,308 values in all.
- Range: from −4.57 to 4.07.
- Zero crossings: 163, about one every 8 candles. They often come in pairs a few candles apart when the close sits near its average.
- Beyond the levels: at or above +2 on 63 candles (4.8%) and at or below −2 on 111 (8.5%).
The Step 5 picture covers 05:27 to 11:16 on the platform clock, 70 candles, and the line crossed zero 11 times in it. Its highest value was 2.85, at 08:00, and its lowest −2.47, at 06:30, so it touched the +2 and −2 levels only briefly. Between 10:50 and 11:15 it crossed zero five times in twenty-five minutes, which is the whipsaw that a zero-line rule meets when the close sits near its average. In a second window of our recording, from 10:44 to 16:33 (not pictured), it crossed 13 times, with a high of 3.18 at 15:15 and a low of −3.24 at 14:00. (The platform draws the value of a candle at the time the candle closes: the candle that opened at 08:00 sits at the 08:05 mark.)
The rules, tested
We wrote the two readings as rules on closed candles, with the option opened at the close of the signal candle. No expiry is given, so the box shows five minutes and fifteen minutes.
- Zero line: Higher on the candle where the PGO rises above zero; Lower on the candle where it falls below zero.
- Levels: Lower on the candle where the PGO falls back below +2 after being at or above it; Higher where it rises back above −2 after being at or below it. This is the RSI-style reading of the levels.
Tested on IQ Option: the zero line and the +2/−2 levels, EUR/USD candles of 29 September to 5 October 2026
| Asset and candles | EUR/USD binary (regular, not OTC): 1,334 five-minute candles (2026-09-29 01:55 to 2026-10-02 20:55 UTC and 2026-10-04 21:00 to 2026-10-05 17:00 UTC). The candles were recorded from IQ Option’s Practice traderoom. The replay places no orders; it only scores the rule on those closed candles, at an 85% payout. |
|---|---|
| Rule tested | The two readings as rules on closed candles; the option opens at the close of the signal candle. Zero line: Higher on the candle where the PGO rises above zero, Lower where it falls below. Levels: Lower on the candle where the PGO falls back below +2 after being at or above it, Higher where it rises back above −2 after being at or below it. Default settings (14, 2, −2); expiry one candle and three candles. |
| Signals | Zero cross, 5-minute, 1 candle: 162 signals (81 Higher, 81 Lower) Zero cross, 5-minute, 3 candles: 162 signals (81 Higher, 81 Lower) Levels +2/-2 like RSI 70/30, 5-minute, 1 candle: 64 signals (37 Higher, 27 Lower) Levels +2/-2, 5-minute, 3 candles: 64 signals (37 Higher, 27 Lower) |
| Outcomes | Zero cross, 5-minute, 1 candle: 71 won, 87 lost, 4 tied; 44.9% of the 158 decided trades won; net −$0.17 per $1 staked at 85% (−$0.14 at 91%) Zero cross, 5-minute, 3 candles: 90 won, 72 lost, 0 tied; 55.6% of the 162 decided trades won; net +$0.03 per $1 staked at 85% (+$0.06 at 91%) Levels +2/-2 like RSI 70/30, 5-minute, 1 candle: 30 won, 34 lost, 0 tied; 46.9% of the 64 decided trades won; net −$0.13 per $1 staked at 85% (−$0.10 at 91%) Levels +2/-2, 5-minute, 3 candles: 29 won, 35 lost, 0 tied; 45.3% of the 64 decided trades won; net −$0.16 per $1 staked at 85% (−$0.14 at 91%) |
| Break-even | At an 85% payout a trade needs to win more than 54.1% of its decided trades to break even (1 ÷ 1.85); at 91%, more than 52.4% (1 ÷ 1.91). |
A replay is only a look back at candles recorded on the dates above: it placed no real orders, covers about four and a half days of one pair, and counts overlapping trades as if they were independent. A short test proves nothing about the future, and no profit and no win rate is promised here. IQ Option’s own blog on backtesting says that most strategies need dozens, and often hundreds, of trades before a result means anything.
The zero-line rule gave 162 signals (the 163rd crossing came on the last candle of a stretch and has no later candle to score). Its five-minute and fifteen-minute results differ by ten points, while one standard error is about four points; none of the four results clearly beats the 54.1% needed at an 85% payout.
Pros and Cons of the Pretty Good Oscillator
| Pros | Cons |
|---|---|
| The scale is in ATRs, so the same levels fit any asset and candle size. | It crosses zero whenever the close crosses its SMA, so it whipsaws: 163 crossings in 1,308 candles. |
| One line, one zero and two levels: easy to read. | The +2 and −2 levels were reached on only 13% of candles, so a level rule gives few signals. |
| Can be set up in two clicks, with one setting. | In our replay none of the rules clearly beat the break-even rate. |
Common mistakes
- Entering on every zero cross. The line often crosses twice within a few candles.
- Reading +2 and −2 like RSI levels without testing. The levels are in ATR units; the price can stay beyond them for several candles.
- Judging divergences too fast. A divergence is a pattern seen after the fact; mark it only when the later swing is complete.
- Changing the period to fit one chart. A longer period smooths more and lags more; test any change on a Practice balance.
Related guides
- RSI on IQ Option and Ultimate Oscillator
- Classic and hidden divergences and oscillators strategy
- Overbought and oversold markets and three popular oscillators
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: What is the Pretty Good Oscillator?
A: An oscillator that measures the distance between the close and its simple moving average in units of the average true range. It is credited to Mark Johnson.
Q: What settings does the Pretty Good Oscillator have on IQ Option?
A: Three: Period (14), Overbought (2) and Oversold (-2). The colours, the line styles and the visibility of the zero line and the level lines are on the Colors and display tab.
Q: What do the +2 and −2 levels mean?
A: The close is two average true ranges above (or below) its simple moving average. They are used like the RSI’s 70 and 30.
Q: Is a cross of the zero line a signal?
A: It is used as one. On EUR/USD 5-minute candles the line crossed zero every 8 candles, and the results of the rule are in the tested box: close to even, and different for different expiries.
Q: Can I use the PGO on any asset?
A: The platform draws it on any chart. The value is in ATR units, so the levels are comparable, but the results of a rule depend on the asset and the candle size and have to be tested.
Q: Can the PGO be used on binary options?
A: It can be drawn on any chart. Whether a rule works is something to test on the Practice balance with the expiry you plan to use.
