Detrended Price Oscillator
The Detrended Price Oscillator or DPO is an indicator designed to eliminate long-term trends and focuses on short-term trends. It is the difference between the actual price and the moving average of the price. It determines the overbought and oversold levels in a market based on short-term fluctuations. The said indicator is easier to identify cycles.
The Detrended Price Oscillator is calculated:
e.g. A 20-day DPO will use a 20-day simple moving average that has an 11 look-
A long entry occurs when the DPO crosses above the zero point. A short entry takes place when the DPO crosses below the zero point.