ROC & Smoothed ROC

This is a combination Rate of Change Indicator and a Smoothed Rate of Change Indicator.

The Rate of Change indicator is a fundamental indicator for momentum. Indeed, it's about as fundamental in terms of momentum as it's possible to get as it's literally examining the rate of change in price.


The Smoothed Rate of Change Indicator (originally introduced by Fred G Schutzman in 1991) is *not* just an ROC plot with smoothing, but instead it's calculated on an EMA of the price instead of the price directly. Thus it is very useful to view trend changes, especially as this indicator crosses the zero line after some time above/below it.


The ROC indicator will show ROC overbought and oversold conditions (optional in settings). As ROC is *not* a bound oscillator, the overbought and oversold levels change dependent on historical variation in min/max levels. This is why you will notice the shaded area in the center, it's upper and lower boundaries denoting OB/OS levels, change over time. You can, of course, change the OB/OS percentage.

The Smoothed ROC indicator will show possible bearish and bullish opportunities as the indicator crosses the center and based upon other metrics such as overall trend (calculated internally - not shown). This, of course, can also be turned off.

Thoughts, feedback, and comments, as always, are welcome.

Tips, voluntary payments, and donations are always welcome! They help to fund continuing refinements and writing of new indicators.

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