Indicator Detrended Price Oscillator Divergence

Detrended Price Oscillator Divergence

Detrended Price  Divergence Generation III is modern indicator with complex mathematic algorithm (BJF Trading Group innovation). You will see divergenses on the chart and indicator. Arrows painted above/below the open bar and not in the past. You can see when actually you can trade. It is never to late! Signals based on closed bars so the arrows above/below open bar never disappear.

Detrended Price Oscillator Divergence - Short explanation

Metatrader Indicator Detrended Price Divergence indicates fractal divergence by Detrended Price indicator.When divergence appears between Detrended Price and the price, it indicates a high probability that the current trend will finish soon. A signal to buy is when a new Low-fractal is formed below the previous one and a corresponding Detrended Price value is higher than the previous one. A signal to sell is when a new Up-fractal is formed above the previous one and a corresponding Detrended Price value is lower than the previous value. The indicator has a lot of customizable settings.

Detrended Price Oscillator  - Short explanation

The detrended price oscillator (DPO) is an indicator in technical analysis that attempts to eliminate the long-term trends in prices. Leaving short-term trends, the indicator allows immediate overbought and oversold levels to be found more effectively.

The detrended price oscillator is clearly a form of price oscillator, and is related to the "percentage price oscillator" (PPO) and the "absolute price oscillator" (APO). The APO is an essentially equivalent to the well-known MACD indicator. A PPO is an improved alternative to the APO or the MACD for use when a stock's price change has been large, or when comparing the oscillator behavior for different stocks which have significantly different prices.

Although these are not so commonly used with the DPO, for the other price oscillators, as for the MACD, a signal line is frequently generated for the price oscillators by taking an exponential moving average (EMA) of the price oscillator values and plotting the two lines together. A histogram can also be generated for the price oscillators, if desired, just as is done for the MACD indicator.

The DPO is calculated by subtracting the simple moving average over an "n" day period and shifted n/2+1 days back from the price.

To calculate the detrended price oscillator:

Decide on the time frame that you wish to analyze. Set "n" as half of that cycle period.

Calculate a simple moving average for n periods.

Calculate (n / 2 + 1)

Subtract the moving average, from (n / 2 + 1) days ago, from the closing price:

DPO = Close - Simple moving average [from (n / 2 + 1) days ago