Rate of Chg: Difference between revisions
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(Created page with "=== Definition === The Rate of Change indicator (ROC) is a momentum oscillator. It calculates the percent change in price between periods. ROC takes the current price and co...") |
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=== Definition === | === Definition === | ||
The Rate of Change indicator (ROC) is a momentum oscillator. It calculates the percent change in price between periods. ROC takes the current price and compares it to a price "n" periods (user defined) ago. The calculated value is then plotted and fluctuates above and below a Zero Line. A technical analyst may use Rate of Change (ROC) for; trend identification, and identifying overbought and oversold conditions.< | The Rate of Change indicator (ROC) is a momentum oscillator. It calculates the percent change in price between periods. ROC takes the current price and compares it to a price "n" periods (user defined) ago. The calculated value is then plotted and fluctuates above and below a Zero Line. A technical analyst may use Rate of Change (ROC) for; trend identification, and identifying overbought and oversold conditions. | ||
< | <div style="background-color: #E3FBE5;"> Overbought refers to a security with a price that's higher than its intrinsic value. The opposite of overbought is oversold, where a security is thought to be trading below its intrinsic value.</div> | ||
When prices are rising or advancing, ROC values remain above the Zero Line (positive) and when they are falling or declining, they remain below the Zero Line (negative). The Rate of Change (ROC) indicator is can be a good tool for identifying the overall long-term trend of a financial instrument. | When prices are rising or advancing, ROC values remain above the Zero Line (positive) and when they are falling or declining, they remain below the Zero Line (negative). The Rate of Change (ROC) indicator is can be a good tool for identifying the overall long-term trend of a financial instrument. | ||
=== Default Inputs=== | === Default Inputs=== |