The Detrended Price Oscillator (DPO) is a technical analysis indicator that assists investors in identifying price cycles and patterns regardless of the prevailing trend. The DPO exposes short-term price changes by removing the trend component from the price data, making it a handy tool for traders looking for overbought or oversold positions.
The DPO computes the difference between a given price and a moving average, most commonly a simple moving average. On a second chart, this detrended value is presented, allowing traders to analyse price cycles and probable reversal points.
Traders can acquire deeper insights into market dynamics and make more informed decisions by including the Detrended Price Oscillator into their analysis.
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