Detrended price oscillator

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The detrended price oscillator (DPO) is an indicator in technical analysis that attempts to eliminate the long-term trends in prices. Leaving short-term trends, the indicator allows immediate overbought and oversold levels to be found more effectively.

The DPO is calculated by subtracting the simple moving average over an N day period and shifted N/2+1 days back from the price.

To calculate the Detrended Price Oscillator:

Decide on the time frame that you wish to analyze. Set n as half of that cycle period.

Calculate a simple moving average for n periods.

Calculate (n / 2 + 1)

Subtract the moving average, from (n / 2 + 1) days ago, from the closing price:

           DPO = Close - Simple moving average [from (n / 2 + 1) days ago]