Indicator - Rate of Change
-
- 0
- 631
- 0
Definition Rate of Change
The rate of change divides the price of the day by the price x days ago.
Interpretation Rate of Change
The Rate of Change is similar to Momentum.
It is an overbought/oversold indicator measured according to its position relative to 100.
It also gives good divergence signals.
A bullish divergence occurs when the stock price makes new lows while the Rate of Change fails to make new lows.
A bearish divergence occurs when the stock price makes new highs while the Rate of Change fails to make new highs.
