The Detrended Price Oscillator (DPO) indicator for MetaTrader4 is built to filter out the underlying trend from price and make is less cumbersome to spot cycles. Traders can easily determine cycles as well as overbought and oversold levels.
The Detrended Price Oscillator (DPO) indicator does not line up with the most recent prices since is centered on a displaced moving average and also owing to it not being a momentum oscillator.
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Example Chart
Price is said to be above its moving average when the Detrended Price Oscillator (DPO) is above the zero line and is basically considered a bullish alert. In the same light price is said to be below its moving average when Detrended Price Oscillator is below the zero line and as such it tagged a bearish signal.
Buy and sell alerts on the Detrended Price Oscillator are interpreted as follows:
Possible Buy Alert
If the Detrended Price Oscillator (DPO) crosses above the zero mark.
If the Detrended Price Oscillator (DPO) moves into a confirmed oversold territory and moves back above the oversold level.
Possible Sell Alert
If the Detrended Price Oscillator (DPO) crosses below zero mark.
If the Detrended Price Oscillator (DPO) moves into a confirmed overbought territory and dips back below the overbought level.
Another dominant way to deploy the Detrended Price Oscillator (DPO) is adopting divergence. As such when divergence are shown to happen between the current price and a detrended price, it is indicative of a likely end to the current trend.
The parameter settings i.e. the “x_prd” variable on the Detrended Price Oscillator (DPO) indicator can tweaked in order to get the best fit.
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Download the “DPO.ex4” MT4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (x_prd, CountBars), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: oscillator, divergence