Concept
ROC
ROC, also known as smoothed ROC, is a Momentum & Oscillators concept. The Library holds 5 implementations, each one a working definition you can pull into Quant.
Top ROC indicators
5 total
What is ROC?
ROC, rate of change, is percentage momentum: the current close minus the close n bars ago, divided by that older close, times 100. A reading of +5 means price is five percent above where it stood n bars back; zero means unchanged. It is the normalized sibling of raw Momentum, which takes the same difference in points. The percentage form is what makes ROC comparable across instruments and across time, since a 10-point move means something very different at a price of 100 than at 10,000.
ROC oscillates around zero with no upper bound, while the downside is floored at -100 for a price series that stays positive (a fall to zero), so overbought and oversold have to be judged against the instrument's own history rather than fixed levels. One structural quirk deserves respect: each reading depends on exactly two bars, the current one and the one leaving the window, so ROC can jump or slump when an extreme old bar drops out even while price stands still (the drop-off effect). Smoothed-ROC variants average the line to tame this. ROC is also the building block of larger constructions: the Know Sure Thing sums smoothed ROCs at four horizons with fixed weights, and the Coppock Curve applies a weighted average to the sum of two long-horizon ROCs.
How traders use it
- As a zero-line bias read: positive and rising ROC frames upward pressure, and zero-line crosses serve as simple momentum triggers, though raw crosses are noisy enough that most systems filter them with a trend condition or smoothing.
- As history-relative extremes: because the line has no fixed bounds, stretched readings are defined by percentile rank against the instrument's own past rather than by universal thresholds.
- As a divergence source: price setting a new extreme while ROC sets a lesser one is the standard regular divergence read, applied to percentage momentum.
- As a cross-sectional ranking: ROC over a common lookback is a simple basis for relative strength comparisons and rotation work, ranking instruments by percentage change over the same window.
ROC vs its rate-of-change relatives
Momentum: The same difference without the division: momentum is in points, ROC in percent. Over stretches where the base price changes little they trace nearly identical shapes; across instruments or long spans of time, only ROC stays comparable.
ROC-of-ROC: The second derivative: ROC applied to ROC measures whether momentum itself is accelerating or decaying, one step further from price and one step noisier.
TRIX: Also a one-bar percentage rate of change, but taken on a triple-smoothed EMA of price rather than raw closes, which filters out most of the noise ROC is known for.
More ROC implementations
Related concepts · Rate-of-change cluster
Concept family
Momentum & Oscillators
91 concepts mapped · 72 in the Library
ROC FAQ
What is the difference between ROC and Momentum?
Arithmetic only: momentum subtracts the old close from the new one, while ROC divides that difference by the old close and multiplies by 100. The shapes are nearly identical while the base price changes little, but percentage readings compare cleanly across instruments and across eras of a rising price series, which is why longer-horizon and cross-market work generally prefers ROC.
What is a good ROC period?
There is no single standard. Short lookbacks in the 9 to 14 bar range are common defaults for swing-scale readings, while longer settings track intermediate cycles. The trade-off is the usual one: shorter reacts faster and whipsaws more. Multi-horizon composites like the Know Sure Thing exist precisely because no one lookback captures every cycle at once.
Why did ROC change when price barely moved?
That is the drop-off effect. Each ROC value compares the current close to one specific old close, so when a spike or crash bar ages out of the window, the reading shifts even if today's price is flat. It is an artifact of the fixed two-bar comparison, and it is the main reason smoothed-ROC variants exist.
Build ROC your way.
Quant writes, tests, and refines it with you — then it runs on LuxAlgo charting or ports to TradingView.