Rate-of-Change [ROC]

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The Rate-of-Change function determines the amount by which a field has changed over a given period of time, expressed as a raw value or as percentage. Parameters ------------------ Data            The data to use in the calculation. This is typically a field in a data series or a calculated value. Period          The number of bars of data to include in the calculation, not including the current value.                     For example, a period of 3 compares the current value with the value three bars ago. As Percent   A boolean value indicating whether to return the change as a raw value or as a percentage.                     A value of zero indicates to return the actual change in value.                     Any other value (non-zero) indicates to return the change in value as a percentage. Function Value ------------------------ The Rate-of-Change Indicator is technically the same as the Change in Value function or the Percent Change in Value function, depending on whether the As Percent parameter is selected. In either case, the function returns the amount by which the data has changed over the given period. The Percent Rate-of-Change value is traditionally multiplied by 100 for easier graphing. The Rate-of-Change Indicator at the beginning of a data series is not defined until there are enough values to fill the given period. Close     ROC(Close,2,0) ---------------------------------------    2    3    4                2    6                3    6                2    6                0 Usage ----------- The Rate-of-Change (ROC) indicator can be used for analyzing both price data and volume data. When analyzing price data, 12-day and 25-day ROCs can be useful short/intermediate term indicators. Longer term ROCs may also be useful for detecting long term trends. Shorter term ROCs, such as a 12-day ROC, can be used effectively as overbought/oversold indicators. The higher the value, the more overbought a security is. The lower the value, the more oversold. In both cases, the market will eventually correct to rate-of-change closer to zero. When analyzing volume data, spikes in the rate-of-change typically accompany breaking out of a trend. In other words, when a sharp increase in volume occurs, the top or bottom of a current trend may be about to be reached, or a current lull may be broken. Source ------------ This indicator is based on entries in "Technical Analysis From A To Z" by Steven B. Achelis. 12-day and 25-day Price Rates-of-Change analysis was popularized by Gerald Appel and Fred Hitschler in their book "Stock Market Trading Systems".