Detrended Price Osc

The Detrended Price Oscillator Indicator is a technical analysis tool that strips out price trends in an effort to estimate the length of price cycles from peak to peak or trough to trough.

Description

The Detrended Price Osc is used for measuring the distance between peaks and troughs in the price/indicator, which are used to estimate buy and sell points in line with the historical cycle. Traders can use the estimated future peaks as selling opportunities or the estimated future troughs as buying opportunities. DPO is not typically aligned with the most current prices, it is offset to the left (the past) which helps to remove the current trend.

A detrend involves removing the effects of the trend from a data set to show only the differences in values from the trend; it allows cyclical and other patterns to be identified. Detrending can be done using regression analysis and other statistical techniques.

The Detrended Price Oscillator indicator (DPO) compares past prices to a displaced (shifted to the past) Simple Moving Average. The SMA is displayed as a Zero Line, with DPO fluctuating between positive (above the line) and negative (below the line) values. Simply put, a positive value means that the price was above the SMA and a negative value means the price was below the SMA.

Default Inputs

Price( close ) sets the price value used in the calculation.

Length( 14 ) sets the number of bars to include in the calculation.

ColorNormLength( 14 ) sets the number of bars used to normalize the indicator for gradient coloring.

UpColor( yellow ) sets the color for indicator values that are relatively high over ColorNormLength bars.

DnColor( magenta ) sets the color for indicator values that are relatively low over ColorNormLength bars.

GridForegroundColor( black ) sets the color for numbers in Scanner cells when both UpColor and DnColor are set to positive values.