Trading Using Detrended Price Oscillator (DPO)

In Continuation With Last Article
Ranging Markets
Set overbought and oversold levels based on observation of past price behavior.

• Go long when Detrended Price Oscillator crosses below and then back above the oversold level.
• Go short when Detrended Price Oscillator crosses above and then back below the overbought level.

Trending Markets
Only trade in the direction of the trend.

• Go long when Detrended Price Oscillator crosses below zero and then turns back above.
• Go short when Detrended Price Oscillator crosses above zero and then turns back below.

Divergence


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