This article has been translated from English to Gen Z Slang.
The Rate-of-Change (ROC) is kinda like a technical indicator that spills the tea on the percentage change between today's price and the price from back in the day, like x days ago. 📈
The ROC indicator, also known as the 'Momentum' flex, is a straight-up momentum oscillator that's all about that vibe check.
This technical indicator vibes below the price chart and does a lil' dance above and below the zero line as the Rate-of-Change goes from positive to negative. 💃
Just like other momentum indicators, ROC has these "extra" overbought and oversold zones that you can totally tweak based on the market mood. 📊
Pro tip: Currencies can be oversold or overbought and stay that way for what seems like forever. 😴
How to use ROC
Basically, prices are on the up and up as long as the Rate-of-Change is flexing positive. 🔥 On the flip side, prices are taking the L when Rate-of-Change goes negative.
When ROC vibes higher, it's like prices are on some caffeine-induced rise. ☕️
A major upward rush in ROC is like the price's glow-up moment. 💅
If ROC is positive and climbing, that's the tea on increasing buying pressure. 🤔
If ROC is positive but dipping, the tea is the buying vibes are cooling down, and the price rise is slowing. 🧊
ROC dives deeper into the negative territory when the price takes a nosedive. 😬
A gnarly downward plummet means prices are falling fast, like oh no. 😱
If ROC is negative, it screams selling vibes, and prices be dropping. 📉
The more negative the ROC, the stronger the selling feels, and the faster the decline. 🚀
When ROC crosses above 0, it's like your fave influencer just said "buy it now!" 💸
When ROC dips below 0, consider it a solid "you might wanna sell" from the universe. 🌌
How to Calculate ROC
ROC is all about the percentage change between what's happening now and what went down n periods ago. 🔄
ROC = [(Today’s Close Price – Close Price n periods ago) / Close Price n periods ago] x 100
For a 10-day window, do the math like this:
ROC = [(Today's Close Price – Close Price from 10 days ago) / Close Price from 10 days ago] x 100