The De-trended Price Oscillator (DPO) is an indicator that attempts to eliminate the trend in prices.
De-trended prices allow you to more easily identify cycles and overbought/oversold levels.
Directional system (ADX)
DEFINITION
Directional system was developed by J. Wilder in the middle of 1970s as an addition to the system PARABOLIC SAR, and then it was advanced by a number of the analysts. ADX defines the tendency and shows, whether it moves quickly enough to follow it. ADX helps to take benefit, being still in the middle of important trends.
INTERPRETATION
This indicator promotes searching of tendency force. If ADX rises, it means that the market tendency becomes stronger. At such times, it is desirable to conclude the bargains only in the direction of the tendency. When ADX falls, it means that the tendency is questionable. Signals submitted by oscillators (RSI, Momentum) are important in this case.
The meaning of the directional analysis is in the fact that it traces changes in mass optimism and pessimism, measuring ability of the bulls and bears to remove the prices beyond the limits of a price range of the previous day. If the today's best price is above yesterday's one, the market becomes more optimistic. And on the contrary, if the today's lowest price is below the yesterday's lowest one, it is possible to speak about changing of the market to pessimism.
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