Rate of Change

From Traderpedia

Definition:
A simple technical indicator that compares the most recent price to the price a certain number of periods ago.


This number is expressed as a ratio.

For example:

If the most recent price is 20 The price 10 periods ago was 19

The 10 period rate of change (ROC) = 20/19 = 1.05

Therefore if the Rate of Change is above 1 the market is rising, and if below 1 the market is falling.

This indicator is very similar to the Momentum Indicator