- Strips out price trends in an effort to estimate the length of price cycles from peak to peak or trough to trough.
- The detrended price oscillator (DPO) is used for measuring the distance between peaks and troughs in the price/indicator.
- If troughs have historically been about two months apart, that may help a trader make future decisions as they can locate the most recent trough and determine that the next one may occur in about two months.
- Traders can use the estimated future peaks as selling opportunities or the estimated future troughs as buying opportunities.
