Detrended Price Oscillator
Removes the long-term trend from price to expose shorter cycles; useful for timing cyclical highs and lows in range-bound conditions.
Formula
DPO = Close_{t − (n/2 + 1)} − SMA(n) shifted back (n/2 + 1) barsThe Detrended Price Oscillator subtracts an SMA shifted back by (n / 2 + 1) periods from the current close, effectively cancelling out the dominant trend and leaving oscillations around the cycle midpoint. The lookback is typically 20–21 periods.
DPO does not extend to the current bar (by design) — it looks back at past cycles, not forward. It helps traders measure the length and amplitude of a recurring cycle (e.g. a 20-day swing cycle) and anticipate when price is likely to peak or trough relative to that cycle. It should not be used to identify the direction of the main trend.
Related Terms
Awesome Oscillator
Bill Williams momentum oscillator measuring the difference between 5- and 34-period SMA of midpoints; histogram colour changes signal momentum shifts.
IntermediateCommodity Channel Index (CCI)
Oscillator measuring how far price deviates from its statistical mean; above +100 is strong momentum, below −100 suggests oversold.
IntermediateMomentum Indicator
Measures the absolute change in price over n periods; positive and growing values confirm trend strength, declining values warn of exhaustion.
BeginnerRate of Change (ROC)
Percent change between the current close and the close n periods ago; positive values confirm upward momentum, negative values confirm selling pressure.
Beginner