CALCULATING A RATE OF CHANGE
A rate of change oscillator (Roc) is calculated by dividing the price in the current time period by the price
n periods ago. For example, a 10-day rate of change would be today's price divided by the price 10days
ago. Roc indicators are quite useful in wide trading range markets but can give misleading signals if a
strong trend is in force. In addition, a specific Roc oscillator will reflect only one cycle. Incorrect
interpretations will occur if another cycle length is dominant. Combining various Roc oscillators into a
single indicator is one method with which to improve the reliability of this technique.