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ROC Indicator Calculation Guide

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49 views1 page

ROC Indicator Calculation Guide

Uploaded by

tyai1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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How to Calculate the ROC Indicator

There are several methods to calculate the price rate of change in the roc technical
analysis:

1. This formula is suggested by Stephen Akelisin in the book Technical analysis from
A to Z. The Rate of Change is calculated as the difference between the current price
and the price of the previous period.

ROC = P(i) – P(n)

P(i) is the current price, and P(n) is the price of n periods ago. A similar approach
was initially applied to Momentum, with the only difference being that ROC showed a
numerical value, and Momentum was calculated as a percentage. Since the
percentage ratio is more convenient in terms of perception of price changes, it was
decided to abandon this formula over time. But in some sources, it is still found.

2. This formula for calculating the ROC is proposed in the book Technical Analysis of
the Futures Markets by John J. Murphy. Instead of the difference, this formula uses
the ratio of the current price to the price for the previous period.

ROC = P(i)/P(n) × 100%

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