Detrended Price Oscillator (DPO)

The picture below shows how DPO (Detrend Price Oscillator) works on Metatrader platform.
Created by Welles Wilder, creator of RSI, the Detrended Price Oscillator (DPO) is an indicator that attempts to eliminate the trend component from the price curve in order to allow the trader to easily identify cyclical component as well as overbought and oversold areas.

Calculation Formula

DPO (i) = Close (i) - ADM (i, N)

Close – Closing price
SMA – Simple Moving Average
N – Period

N refers to the number of periods used to calculate the Detrended Price Oscillator (20 by default). A 20-day DPO would use a 20-day SMA that is displaced by 11 periods {20/2 + 1 = 11}. This displacement shifts the 20-day SMA 11 days to the left, which actually puts it in the middle of the look-back period. The value of the 20-day SMA is then subtracted from the price in the middle of this look-back period. Basically, DPO(20) equals price 11 days ago less the 20-day SMA.

The result is an oscillator that will fluctuate around the 0 level.

Trading Signals

SELL Signal

  • DPO line forms a peak;
  • DPO line crosses down level 0;
  • Bullish divergence: The line of the indicator DPO forms a higher high, the price makes a lower high

BUY Signal

  • DPO forms a valley curve;
  • DPO line crosses upward the level 0;
  • Bearish divergence: The line of the indicator DPO forms a lower high, the price makes a higher high

Detrended Price Oscillator Indicator


  • File: Detrended Price Oscillator.mq4
  • Size: 4 Kb
Detrended Price Oscillator (DPO) posted by is rated 5 / 5 on 3210 reviews.

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