Futures Charts
- Technical Analysis Help
Rate of Change Indicator
Description:
The Rate of Change indicator calculates the market's
change from price of current bar to price of x bars ago.
The difference is returned as a percentage.
Conventional Analysis:
When the Rate of Change indicator is above zero, it
indicates that the market is overbought. When the
indicator is below zero, it indicates that the market is
oversold.
Additional Analysis:
The Rate of Change indicator tests the market to see if it
is in a state known as Bullish Key Reversal or Bearish Key
Reversal. A Bullish Key Reversal occurs when the low of
the current bar is less than the lowest low over the
preceding nine bars and the close of the current bar is
yesterday's close. A Bearish Key Reversal occurs when the
high of the current bar is greater than the highest high
over the preceding nine bars. When there is a Bullish Key
Reversal, the potential exists for an upward move. When
there is a Bearish Key Reversal, the potential exists for
a downward move.
Additional References:
Kaufman, Perry J. The Commodity Trading Systems & Methods.
John Wiley & Sons, Inc. New York. 1978.
Technical Analysis Studies Available to you
are:
You can adjust parameters of each indicator
to suit you.
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