Description

• Rate of Change (ROC) indicator is a very simple yet effective momentum oscillator
• It measures the percent or absolute change in price
• ROC can be a positive or a negative value
• Along With ROC, A signal line which is a moving average of the ROC is plotted

Interpretation

• It is a very easy to understand study, fluctuating above and below the zero line
• If Roc moves above 0 levels, price is in positive trend
• If Roc moves below 0 levels, price is in negative trend
• Being a momentum indicator, it helps in better interpretation of price movement during runaway moves
• ROC having price as its major input makes it a sensitive leading indicator

Default Parameters Used/Inputs

• Price Line
• ROC Bars
• Avg Type
• Avg Bars

Returns/Output

Rate of Change in stocks price over a specific period

Formula

ROC Abs = ((Today's close - Close n period ago)
ROC % = ((Today's close - Close n period ago) / (Close n period ago)) * 100
ROC Avg (Signal line) = Sum of ROC of n periods / n period