Detrended Price Oscillator (DPO) — This handy MetaTrader indicator helps you spot short-term price movements by comparing the current price to a simple moving average adjusted by (Period / 2) + 1 bars. Unlike the stochastic oscillator, the DPO focuses on pinpointing changes in price trends amidst a longer-term trend. You'll find this indicator displayed in a separate window on your chart, and it's compatible with both MT4 and MT5 platforms.
Input Parameters
- MA_Period (default = 14) — This sets the period for the simple moving average used in the DPO.
- BarsToCount (default = 400) — This determines how many bars will be included in the calculation of the indicator.
- EnableNativeAlerts (default = false) — If set to true, the indicator will trigger MetaTrader's native pop-up alerts.
- EnableEmailAlerts (default = false) — If set to true, the indicator will send email alerts. Make sure your email settings are configured properly in MetaTrader via Tools -> Options -> Email.
- EnablePushAlerts (default = false) — If set to true, you'll receive push notifications from MetaTrader. Ensure your notifications are set up correctly via Tools -> Options -> Notifications.
- TriggerCandle (default = Previous) — This specifies which candle will trigger alerts: Previous for the last closed candle or Current for the ongoing candle.
Trading Strategy
To identify trend shifts, keep an eye on when the DPO crosses the zero level. It's worth noting that this indicator tends to lag, so it might pay off to anticipate these crosses rather than react to them. While it may not be the most precise tool for immediate trading decisions, it can certainly help confirm short-term trends.
Another great way to leverage the Detrended Price Oscillator is by spotting divergences between the DPO and the price chart. For instance, you might notice a significant trend reversal by comparing a double top in price with a lower high on the DPO chart, as illustrated in the chart below.
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