Rate of Change (ROC) is a technical analysis tool that calculates the percentage change in price between a current period and a prior period. It is expressed as:
ROC=Price in N periods agoCurrent Price−Price in N periods ago×100%
Traders use ROC to identify the speed at which prices are changing. A high positive ROC indicates accelerating upward momentum; a large negative ROC suggests accelerating downward momentum. Because it’s a momentum indicator, ROC can help spot potential trend reversals or overbought/oversold conditions when extreme values occur.
