Overview
The Detrended Price Oscillator (DPO) is an indicator designed to remove trend from price and make it easier to identify cycles. DPO does not extend to the last date because it is based on a displaced moving average. However, alignment with the most recent is not an issue because DPO is not a momentum oscillator. Instead, DPO is used to identify cycles highs/lows and estimate cycle length.
Description
The Detrended Price Oscillator (DPO) measures the difference between a past price and a moving average. Keep in mind that DPO is itself displaced to the left. The indicator oscillates above/below zero as prices move above/below the displaced moving average. Even though this indicator looks like a classic oscillator, it is not designed for momentum signals. The displaced moving average is set in the past and this is why the DPO is shown in the past. Even with this displacement, DPO peaks and troughs can be used to estimate cycle length. DPO filters out the longer trends to focus on shorter cycles. More information about this indicator and its trading signals can be found here.
Settings in the chart
Settings in Strategies
Detrended Price Oscillator (DPO) can be used both separately and together with other indicators in the Strategy Builder.