Rate of Change (ROC)

The Rate of Change (ROC) indicator displays the difference between the price today and the price a given number of trading periods ago.

Rate of Change (ROC)

The Rate of Change (ROC) indicator displays the difference between the price today and the price a given number of trading periods ago.

 


Rate Of Change Calculation

The price Rate of Change (ROC) indicator displays the difference between the price today and the price a given number of trading periods ago.   The ROC plot requires two inputs: the period of comparison for the price and the averaging period used for the signal line.

Application of Rate Of Change

The Rate of Change (ROC) indicator signals overbought positions when the indicator is at a peak and oversold conditions when the indicator is at a minimum.  A signal line, which is a moving average of the ROC, is used to indicate trend reversals. 



The Rate of Change Indicator plotted below a Price chart

Related Terms