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Detrended Price Oscillator (DPO) Indicator

The Detrended Price Oscillator (DPO) is used to identify short term cycles.  It does so by removing the long term price cycle, leaving the shorter term cycles.  Since long term cycles are made up of many shorter term cycles, this indicator can be used to capitalized on shorter term trading.  The oscillator is considered most effective using periods of 21 bars or less.

The general rules of thumb are to only open trades in the direction of the trend.  Go long when Detrended Price Oscillator crosses below zero and then turns back above.  Go short when Detrended Price Oscillator crosses above zero and then turns back below.

See Also

Detrended Price Oscillator (DPO) Developer Help