Skip to Main Content
Understanding Momentum in Investment Technical Analysis
book

Understanding Momentum in Investment Technical Analysis

by Michael C. Thomsett
June 2019
Intermediate to advanced content levelIntermediate to advanced
146 pages
3h 15m
English
Business Expert Press
Content preview from Understanding Momentum in Investment Technical Analysis

CHAPTER 6

Rate of Change

Overview: The rate of change (ROC) oscillator is an alternative measurement of momentum, setting up a centerline as a “zero” value, with movement either above or below, each indicating varying degrees of momentum. A major drawback is the lack of limitation on movement away from the zero line; however, ROC does not measure averages, but does quantify changes in price over a set period and, as a result, changes in momentum.

Rate of change (ROC) is a centered oscillator, meaning the middle line value is treated as an index with a value of zero. The ROC line moves above or below this level and provides specific types of momentum signals.

ROC compares the current price of stock to the 12 periods immediately preceding the day. ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

MIDAS Technical Analysis: A VWAP Approach to Trading and Investing in Today's Markets

MIDAS Technical Analysis: A VWAP Approach to Trading and Investing in Today's Markets

Andrew Coles, David G. Hawkins
Equity Markets, Valuation, and Analysis

Equity Markets, Valuation, and Analysis

H. Kent Baker, Greg Filbeck, Halil Kiymaz

Publisher Resources

ISBN: 9781949991635