It might even make a good exit indicator as well. It can be used as your primary confirmation signal or as a secondary filter in your algorithm. Confirmation Indicator Used as a color change, this confirmation indicator lives below your chart as an oscillator. Cycling Math The broad strokes of the math to calculate the DPS indicator include highlighting the dominant cycle of market price by subtracting a half-cycle EMA (Exponential Moving Average) from a quarter cycle EMA. Ehlers takes a deep dive into these concepts in his book “MESA and Trading Market Cycles”. Off To The Market By the time it made its way into our arena, analysts were using it to predict changes in market conditions and price action, especially those revolving around commodities with seasonal cycles. Originally, it was used in the prediction of various occurrences in nature, including planetary movements and tuned for the field of electrical engineering. Class is in Session The origins of the DSP concept were not specifically designed with trading in mind. Over the years, people have found different ways of using it to accommodate different securities, but we think we’ve got a pretty simple interpretation for ease of operation. Who’s That Guy? This indicator was developed by none other than our hero John Ehlers and was showcased in the July 2000 edition of Stocks & Commodities magazine. Let’s take a peek at what the DSP can do for us. That being said, we’re bringing you things you won’t find there. We’ve been using MT4 since its inception back in 2005 and for the most part, the included indicators really haven’t changed much. We’ll have to see if it provides us with awesome signals. Aesthetically speaking, it’s got an awesome name. A Little Something to Look At This week, we’re investigating an indicator called the Detrended Synthetic Price indicator, developed by a guy we know and love.

Price actionswing oscillator