The Detrended Price Oscillator, by Gerald Appel, attempts to eliminate the long-term trends in prices by using a displaced moving average so it does not react to the most current price action. This allows the indicator to show intermediate overbought and oversold levels effectively.
Configuration Options
Field: Price or combination of prices to use as the base for average calculations. Possible values include:
-
Open
-
High
-
Low
-
Close
-
Adjusted Close
- HL/2 \( \left ( \frac{High + Low}{2} \right ) \)
- HLC/3 \( \left ( \frac{High + Low + Close}{3} \right ) \)
- HLCC/4 \( \left ( \frac{High + Low + Close + Close}{4} \right ) \)
- OHLC/4 \( \left ( \frac{Open + High + Low + Close}{4} \right ) \)
- Period: Number of bars to use in the calculations.
- Moving Average Type: Type of moving average to use in the calculations:
- Simple
- Exponential
- Time Series
- Triangular
- Variable
- VIDYA
- Weighted
- Welles Winder
- Hull
- Double Exponential
- Triple Exponential
- Color Selectors: Colors to use for graph elements.
- Display Axis Label: Whether to display the most recent value on the Y axis.
Formula
\[DPO = Close – MA_{n}\;of\;\left ( \frac{n}{2}+1 \right )\;periods\;ago \]