Momentum oscillator
Rate of Change (ROC)
Measures the percentage price change over a lookback, momentum in its purest form.
What is Rate of Change (ROC)?
The Rate of Change (ROC) is a momentum oscillator that measures the percentage change between the current price and the price a set number of bars ago. It oscillates around zero and shows how fast price is moving.
How it works
ROC is positive when price is higher than N bars ago and negative when lower; the further from zero, the stronger the momentum. Zero-line crossovers signal momentum shifts, while divergence between ROC and price warns that a move is losing steam.
How traders use it
- ▸Zero-line cross: momentum turning positive or negative.
- ▸Extremes: overbought/oversold relative to recent range.
- ▸Divergence: ROC and price disagreeing flags reversals.
- ▸Confirmation: rising ROC supports a breakout.
Build Rate of Change (ROC) without code in Algovex
ROC is a node in Algovex, trade its zero-cross or divergence, combine with a trend filter, backtest, and export. No code required.
Key parameters
| Parameter | What it does |
|---|---|
| length | Lookback period for the percentage change (commonly 9–14). |
| source | Price input, usually close. |
Frequently asked questions
What is the difference between ROC and momentum?
They're closely related: momentum measures the absolute price difference over a period, while ROC expresses it as a percentage, making it comparable across instruments. Algovex offers ROC as a node to backtest.