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Rate
April 30, 2020
Recession
April 30, 2020

Rate Of Change

Published by TradersColo at April 30, 2020
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    A rate of change (ROC) is an economic indicator for technical analysis. It is a rate that measures how one quantity changes in relation to another quantity. In the Financial market, it assesses the change in price levels over time or the slope of the trendline. Different from the value of momentum, which depends more on the trendline chosen by the technical analyst than on the time period used, ROC focus on the time period used to calculate ROC.

    Calculation:
    ROC=( previous value / current value −1)∗100

    Because Forex Market is a 24 hours market, the closing price used in calculating ROC is commonly taken to be the closing price of the New York Stock Exchange. The reason is that when the NYSE closes, the trading volume tends to decline.

    It is the same as momentum, ROC can be used to generate signals for buy and sell. Rising in ROC indicates a short-term buying pressure while falling in ROC indicates short-term selling pressure.

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