Detrended Oscillator of the famous trader Joe DiNapoli is an instrument for calculating overbought/oversold market zones.
Detrended Oscillator is calculated by a simple formula:
MA(close) – close
In other words, the closing price distance to its own moving average is plotted in the indicator window. DiNapoli suggests using 7-period simple moving average in this formula.
The indicator view in the chart:
The indicator has the following parameters:
Period - setting of the indicator calculation period.
Source - setting of the indicator calculation parameters:
Panel - selection of the indicator location in the chart:
- New panel
Show value - display of the indicator value on the price scale on the left.
Scale/Auto-scaling - if this option is on, the scale will be automatically calculated, based on the minimum and maximum indicator values, so that the indicator would fit in the chart.
Color - color setting of the indicator.
Visual type - visual setting of the indicator display in the chart:
- Up arrow
- Down arrow
- Axis label
Line style - setting of the line display style:
- Dash - dot
- Dash - dot - dot
Width - setting of the indicator line width.
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