What is Rate of Change (ROC)?

What is Rate of Change (ROC): A chart indicator/oscillator used in the technical analysis of financial markets. Its primary purpose is to track market momentum, trend strength, and overbought/oversold conditions.

Category: Technical analysis indicator

How is Rate of Change (ROC) Used: The Rate of Change (ROC) is an oscillator that measures the difference between the most recent closing price and the closing price x number of periods ago. In this way, it measures the current market momentum. It’s typically used to determine trend changes, appropriate trade entry/exit levels, overbought/oversold conditions, and price-oscillator divergences.

What Does Rate of Change (ROC) Consist of: ROC is presented as a line that is unbounded, with fluctuations above and below a zero line. Historical indicator levels are used to determine if a market may currently be overbought, oversold, or neutral. The indicator is usually placed either above or below the price chart.

What Does Rate of Change (ROC) Look Like:

Chart of Rate of Change (ROC)
Chart of Rate of Change (ROC) – Source: TheTechnicals.com and TradingView

<<< Back to ‘What is…?’

IMPORTANT: TheTechnicals.com makes the information on this website available as a service to be used for informational purposes only. While we have tried to provide accurate and timely information, and have relied on sources we believe to be reliable, the site may include inadvertent technical or factual inaccuracies or omissions. We do not warrant the accuracy or completeness of the materials provided.

Neither TheTechnicals.com nor any of its affiliates, directors, officers or employees, will be liable or have any responsibility for any loss or damage that you may incur in the event of any failure or interruptions of this site, or the data contained in it, or from any other cause relating to your access to, inability to access, or use of this site or these materials.