V.10:2 (55-60): SIDEBAR: CALCULATING A RATE OF CHANGE OSCILLATOR
Product Description
CALCULATING A RATE OF CHANGE
OSCILLATOR
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.
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.
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