Trends/Relative strength, cycles and structure

Detrended price oscillator

Price compared with a moving average shifted back in time, to remove the trend and show the cycles.

Relative strength, cycles and structureBest on 6M, 1YAlso called DPO

Illustration of the Detrended price oscillator shape. It is a sketch, not real price data.

What it shows

DPO compares the close with a simple moving average from half a period ago. For a 20-bar average, it uses the average shifted back by 11 bars. This lines up the average's center with the price.

The result is the price without the slope of the trend, so cycles are easier to see.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

N = 20. Shift = N ÷ 2 + 1 = 11.
DPO = close − SMA(N), shifted back by 11 bars.
Plot under the price.
Mark zero.

Starting values: N 20; Shift 11 bars. These are proposed and will be tuned on real price data before launch.

How to read it

The panel shows DPO.
Peaks and troughs show swings around the average.
The dashed line is zero.

Status labels you may see

Label	What it means
Above zero	Close above the shifted average.
Below zero	Close below it.
Near zero	Within 1%.

What cancels it

Nothing cancels it.

What traders check next

Spacing between peaks.
Price trend.
Cycle length.

Limits

The latest values are not available, because of the shift.
Not for timing.
Averages lag.

Try it in forecastviz

Open any ticker and choose Relative strength, cycles and structure → Detrended price oscillator in the left menu.
Switch between 6M, 1Y to see how the picture changes.
Compare with Dominant cycle and Simple moving average on the same chart.

Open on a ticker

Questions

What does it remove?

The long-term slope.

Why shift?

To center the average on the price.