Investor/RT Tour - Detrended Oscillator

Investor/RT Tour ( more on Technical Indicators )
Detrended Oscillator

The Formula . . .	. . .more on Formulas
MA2[ PRICE - MA1(PRICE) ]

The Presentation . . .	. . . more on Charts
Above is a 13 Minute Line Chart for the NASDAQ Composite Index (COMPX). In the lower pane, the Detrended Oscillator is drawn in a burgundy color, using the preferences specified below. The oscillator oscillates around a reference line of zero.

The Preferences . . .	. . . more on Preferences

Price - Price used as input to MA1. MA1 - Smoothing type and period used to initially smooth the prices. MA2 - Smoothing type used to smooth the difference between price and MA1. Line Color - Color and style of the resulting oscillator line.

The Description . . .
The Detrended Oscillator is calculated by first calculating the difference between "price" and a user specified moving average of "price" for the instrument. The price used may, of course, be the high, low, close, open, average of high and low, or average of high, low, and close. The resulting array of differences is then smoothed according to another user specified moving average. The resulting indicator oscillates around zero. This indicator makes it easy to spot situations when an instrument is trading at historical extremes relative to its average price. The Detrended Oscillator can be used in scans, trading signals, and custom indicators. The RTL token is DTREND.