GlossaryBeginner
Rate of Change (ROC) and Momentum
Simple, unsmoothed oscillators that measure the percentage (ROC) or absolute (Momentum) change in price over a fixed look-back period.
Rate of Change (ROC) measures the percentage change between the current price and the price a set number of periods ago; Momentum measures the same comparison as an absolute price difference rather than a percentage.
Both are among the simplest, least-smoothed momentum tools available — unlike RSI or a moving average, neither applies any internal averaging, which makes them react immediately to price changes but also makes them correspondingly noisier. See Kaavon's dedicated ROC and Momentum article for both calculations.
Examples
- ROC crossing above zero means price is now higher than it was the full look-back period ago, regardless of what happened in between.
- Momentum and ROC measure the same underlying idea — price change over a fixed period — expressed as an absolute amount versus a percentage, respectively.