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introduction

Detrended Price Oscillator(DPO) is an indicator commonly used in technical analysis. Its main function is to eliminate the trend components in price trends and make it easier for traders to observe short-term price fluctuations. This indicator calculates the difference between the current price and the moving average price in a certain period of time in the past, so as to identify the short-term periodic fluctuation of the price more clearly.

The history of Detrended Price Oscillator(DPO) can be traced back to 1980s, which was first proposed by Joseph Granville, an American technical analyst. The index was originally designed to help traders observe the short-term fluctuations of prices more clearly, without being affected by long-term trends.

The calculation method of DPO is relatively simple. By comparing the current price with the moving average price in the past period of time, the price difference excluding the trend can be obtained. This makes it easier for traders to distinguish the cyclical high and low points of prices, and then formulate corresponding trading strategies.

The use scenarios of DPO include identifying periodic price fluctuations, confirming short-term trends, and generating potential trading signals through positive and negative intersections. It should be noted that DPO is more suitable for short-term analysis, while for long-term trend judgment, other indicators and analysis methods are usually needed.

Specific calculation method of DPO:

• Calculate the moving average price x days ago (x is the parameter of DPO).
• Subtract the moving average price calculated in step 1 from the current price.

The goal of DPO is to eliminate long-term trends and make it easier for traders to identify short-term cyclical fluctuations in prices. It can be used to find the cyclical high and low points of prices, thus helping to make buying and selling decisions.

At present, the DPO curve can be directly called by inputting: Detrended Price Oscillator or DPO in the SuperEx market index database, and it can be directly applied without calculation.

Specific application of DPO:

Identify cyclical fluctuations: DPO is mainly used to identify cyclical fluctuations in prices and help traders capture short-term market trends.

Confirm the trend: when the DPO value is positive, it may indicate that the price is higher than the average level in the past X days, and vice versa, it indicates that the price is lower than the average level.

Cross analysis: the positive and negative cross of DPO can be used as a trading signal, but it should be used with caution, and it is best to combine other indicators and analysis methods.

It should be noted that DPO is a short-term indicator and is not applicable to the analysis of long-term trends.

Write at the end:

With the development of technical analysis, DPO is widely used in stock, futures and cryptocurrency markets. As a unique trend elimination tool, it provides traders with an opportunity to judge short-term fluctuations more accurately in the market. In practice, many traders combine DPO with other indicators and analysis methods to obtain more comprehensive market information.