The Detrended Price Oscillator (DPO) attempts to remove trend from price to make it more easy for traders to identify price cycles with its peaks and troughs. It is a momentum oscillator that measures the difference between the current price and the price "n" periods ago, where "n" is the number of days in the DPO period. The DPO period is typically set at 14 days.The DPO does not plot the actual price movements; instead, it plots the difference between the current price and the price "n" days ago. This makes it easier to identify cycles, as the oscillator will move back and forth between positive and negative territory. The peaks and troughs of the oscillator will correspond to the peaks and troughs of the price cycle.The DPO is a useful tool for traders who are looking to identify and trade price cycles. It can be used in conjunction with other technical indicators to confirm price cycles and help make trading decisions.
