Also know as Momentum, the Rate of Change (ROC) MT4 Indicator is responsible for calculating the change in percentage between a period and the next coming period, which is the role of a momentum oscillator. This percent calculation is used to compare the recent price with a prior price n periods ago, which can be inferred from the indicator’s name “rate of change”. As a momentum oscillator, the ROC Indicator plots and oscillator that oscillates around the zero line where the ROC change sign value from positive to negative. Being a momentum oscillator also makes ROC has centerline crossovers in addition to overbought and oversold measurements.
The ROC calculation follows the following formula:
ROC = [(Close – Close n periods ago) / (Close n periods ago)] * 100
Why use ROC and what benefits it holds?
Analyzing momentum of a certain trend in addition to overbought and oversold regions are very important aspects for forex traders. As a momentum oscillator, ROC Indicator is a very prominent tool that supplies the traders with momentum and other trading information. ROC indicates the price dynamics in a desired period of time where it finds the ratio of the recent closing price to a prior closing price, which depicts the price velocity. Other indicators focus on spanning the whole price dynamics over a period of time, however, ROC is unique in that it compares the price changes with close periods to give the traders an insight on how the market is evolving, which allows the traders to modify their strategies and put better plans.
Being plotted as a line, the ROC has another line that represents the balance of momentum to make a distinction between positive and negative ROC values. You can identify a strong trend with increasing momentum if you find the ROC line having a steep angle. Accordingly, you can identify oversold and overbought conditions when you find extreme values of ROC regardless of the sign of the value.
The value of ROC is unchangeable despite the fact that the price of the stock might move with a steady pace or change dramatically. Accordingly, the initially chosen time point is very crucial that the traders vary their values and conduct more ROC measurements to reach an average agreement of how the market is trending and get valuable trading information like the oversold and overbought conditions.
How to install Rate Of Change (ROC) Forex Indicator.mq4?
- Download Rate Of Change (ROC) Forex Indicator.mq4
- Copy Rate Of Change (ROC) Forex Indicator.mq4 to your Metatrader Directory / experts / indicators /
- Start or restart your Metatrader 4 Client
- Select Chart and Timeframe where you want to test your MT4 indicators
- Search “Custom Indicators” in your Navigator mostly left in your Metatrader 4 Client
- Right click on Rate Of Change (ROC) Forex Indicator.mq4
- Attach to a chart
- Modify settings or press ok
- Indicator Rate Of Change (ROC) Forex Indicator.mq4 is available on your Chart
How to remove Rate Of Change (ROC) Forex Indicator.mq4 from your Metatrader Chart?
- Select the Chart where is the Indicator running in your Metatrader 4 Client
- Right click into the Chart
- “Indicators list”
- Select the Indicator and delete
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