Does anyone use or find useful the Detrended Price Oscillator (DPO)?

Kevo

Does anyone use or find useful the Detrended Price Oscillator (DPO)?

I have no idea how to use it, nor have I found it useful.

gord

Kevo " I have no idea how to use it, nor have I found it useful".

Not all indicators are for all users or trading styles, but if you don't know how to use something, I'm not surprised you don't find it useful.

Here's the chartschool article on the DPO indicator.
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:detrended_price_osci

PS; Pretty much every specialized indicator has been added to satisfy requests from users, so I wouldn't downplay an indicator just because you don't like it, some users wanted it.

markd

Way too complicated for me, and too far away from the price and volume action. But, I don't doubt some people can read it and find it useful.

dreamtalk

I tried to use it but I didn't find it useful either. I try to use 4 indicators the most to eliminate confusion and obviously DPO is not one of them.

morganj71

Howard Bandy from his book "Mean Reversion Swing Trading" has a few pages devoted to hit. Obviously he used it as a mean reverting indicator

markd

@morganj71 Thanks for the Howard Bandy mention. If you google "Howard Bandy mean reversion pdf", one of the results,

meanreversionsystems.com/MRTS%20AnalysisWM.pdf

is an excellent discussion of system building and testing. It's the clearest and easiest to understand discussion I've come across. Well worth reading if you lean toward system trading - and thought provoking for discretionary traders as well (how good do you think your discretion is, really?).

Kevo

I still stare at DPO sometimes, and most of the time cannot make heads or tails out of it.

Here are a few things I have noticed... most symbols do not cycle and DPO reveals that. A few symbols do seem to have a steady cycle as revealed by DPO, which maybe is useful to know. If a symbol is trending, DPO seems to be flat on one side.

One thing I'm confused about is the current day. Sine DPO is shifted to the left, the current period is not shown. Am I supposed to figure out what cycle happens next? I guess not.