ROC - Rate of Change
Learn the Rate of Change indicator to measure the speed of price movements.
What is ROC?
Rate of Change measures the percentage change between current price and the price N periods ago.
ROC = ((Current Price - Price N periods ago) / Price N periods ago) × 100
Interpretation
- ROC > 0: Price higher than N periods ago (bullish momentum)
- ROC < 0: Price lower than N periods ago (bearish momentum)
- ROC crossing zero: Momentum shift signal
- Extreme readings: Overbought/oversold conditions
Trading
- Zero-line crossover for trend signals
- Divergence with price for reversal signals
- Extreme readings for mean reversion