Detrended Price Oscillator [NexusSignals]

29. Nov. 2024

Detrended Price Oscillator (DPO) is a detrended price oscillator, used in technical analysis, strips out price trends in an effort to estimate the length of price cycles from peak to peak or trough to trough.

DPO is not a momentum indicator, instead highlights peaks and troughs in price, which are used to estimate buy and sell points in line with the historical cycle. (cf. to investopedia)

DPO indicator made by NexusSignals components :

• a filled area that allow users to see easy the trend of an asset;
  
• a sma moving average on chart (default length is 20)
  
• a 20 sma on oscillator, both ma's are color coded to show uptrend / downtrend
  
• a donchian channel applied to the dpo to show breakouts, breakdowns and resistances/support, reversals
  
• few alerts for price crossing above ma, cross above the 0 dpo line, and for cross above and below the donchian channels top and bottom
  

How you can use DPO indicator ?

The detrended price oscillator (DPO) can be used for measuring the distance between peaks and troughs in the indicator that may help traders to make future decisions as they can locate the most recent trough and determine when the next one may occur in the meassured distance on oscillator between peaks and troughs.

You can use the indicator to find the potential price reversals, for example when the price of an asset is in a bearish trend and the dpo is bouncing from the donchian channel bottom, that may be a potential swing low for that asset, same thing in a bullish trend when the dpo rejecting at top of donchian channel may be a trend reversal, a pullback or swing high.

When DPO is above the 0 trend is in an uptrend and when dpo is below the zero the asset is possible to move into a downtrend.

Also crosses of DPO above and below the DPO moving average may signalising a trend change.

30. Nov. 2024

Versionshinweise

• updated the chart to let users see the data of the trading asset symbol, ticker, and timeframe, also the name of the lines and labels on the oscillator
  
• added option for users to choose the type and the length of the moving average they want the DPO to be calculated, so users can now choose instead of default sma with length 20 any length they want and from following moving averages : "EMA", "RMA", "SMA", "HMA", "WMA", "DEMA" and "VWMA"
  

30. Nov. 2024

Versionshinweise

- updated labels for Top and Bottom of DPO Donchian Channel as they were inverted...