Price Rate of Change Indicator (ROC) PDF
Price Rate of Change Indicator (ROC) PDF
Price Rate of Change Indicator (ROC) PDF
The Price Rate of Change (ROC) is a momentum-based technical indicator that measures the
percentage change in price between the current price and the price a certain number of periods
ago. The ROC indicator is plotted against zero, with the indicator moving upwards into positive
territory if price changes are to the upside, and moving into negative territory if price changes are
to the downside.
The indicator can be used to spot divergences, overbought and oversold conditions, and centerline
crossovers.
KEY TAKEAWAYS
• The Price Rate of Change (ROC) oscillator is and unbounded momentum indicator used in
technical analysis set against a zero-level midpoint.
• A rising ROC above zero typically confirms an uptrend while a falling ROC below zero
indicates a downtrend.
• When the price is consolidating, the ROC will hover near zero. In this case, it is important
traders watch the overall price trend since the ROC will provide little insight except for
confirming the consolidation.