What Is Rate of Change (ROC)?
ROC measures the percentage change in price over a specified number of periods, showing momentum speed and direction.
Quick Answer
ROC measures the percentage change in price over a specified number of periods, showing momentum speed and direction.
What Does ROC Measure?
Rate of Change (ROC) is one of the simplest momentum indicators. It calculates the percentage difference between the current price and the price n periods ago. A rising ROC indicates accelerating upward momentum, while a falling ROC shows deceleration or downward momentum. Because ROC is expressed as a percentage, it allows comparison across assets at different price levels. Zero-line crossovers mark shifts between positive and negative momentum. VaultCharts includes ROC as a free subpane indicator with a configurable lookback period.
ROC = ((Close - Close n periods ago) / Close n periods ago) × 100How to Read ROC
- 1Positive ROC indicates price is higher than n periods ago
- 2Negative ROC indicates price is lower than n periods ago
- 3Rising ROC shows strengthening upward momentum
- 4Zero-line crossovers can signal momentum direction changes
How to Use ROC in Trading
ROC Settings
| Setting | Default | Description |
|---|---|---|
| Period | 12 | Number of periods for rate of change calculation |
Common Mistakes to Avoid
Use ROC in VaultCharts
VaultCharts includes Rate of Change with customizable settings. Combine it with our automated pattern detection and trade signals for better analysis.