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Rate of Change (ROC)

ROC is a momentum oscillator that measures the rate of ascent or descent. It is calculated as the difference between the current Close price and the Close price n periods back. Subsequently, the difference is divided by the Close n periods back and the resulting ratio is multiplied by 100: ROC = Recent Close - Close n periods back x 100 Close n periods back A crossing above the 100 base line signifies an accelerating rising market. Similarly, a crossing below the 100 base line signifies a decelerating downtrend. Being an unbounded oscillator, overbought and oversold conditions are not easily spotted. Hence, visually inspection, at extreme readings below and above the zero line, is necessary.