ROC indicator


Description of ROC indicator

# Forex indicators , # Practical Forex , # Forex strategies

ROC indicator is a technical analysis indicator that belongs to the class of oscillators. It shows the rate of price change over a certain time period (n-periods). As you know, the technical analysis of financial instruments is based on the fact that the market always has a cyclical pattern. At first glance, it may seem that the charts are unique and to some extent this is so, nevertheless, if truly uniqueness were inalienable and the only sign of price changes is not one indicator that would not give a profit to the trader. Any trading instrument – currency pairs, stocks, options and futures always change their value in a certain way. This is due to the nature of financial markets. There is always a struggle between sellers and buyers. Prices change greatly when one or another prevails over rivals,

The ROC indicator is a cunning oscillator, it quite accurately shows optimism / pessimism in the market. Like any other indicator of the family, it can be used in several ways: for analyzing divergences, for tracking “breakdowns” of signal levels directly on the indicator chart. If the growth of the ROC oscillator is observed, this means that bulls prevail in the market, if the bearish fall. Accordingly, a strong motivation for the transaction may be a situation where, for example, there is a trend in the market, and the ROC indicator gives a signal in the same direction. You say that all oscillators work like this? Yes, you are right, but there is a difference, and a substantial one. Due to the nature (formula) of the rate of price change – the ROC indicator can also signal the strength of market participants. If we see a strong slope in the chart of the roc indicator, this indicates a stronger mood of the corresponding type of market participants. That is, when working with the ROC indicator, you can more accurately and comprehensively conduct analysis, which will allow you to earn more.

Another important feature of the ROC indicator is that it is quite acceptable to use it on any timeframes, up to the minute ones. The value of the ROC indicator is considered as the difference in the closing prices of the current candle and the candle for several periods before. The roc indicator is a leading indicator, that is, it signals a future movement a little earlier than its actual start. Of course, you should not think that he is the grail, now you will not make mistakes. Not. This will not happen, because no one cancels false signals. Any indicator is wrong, this is normal. It is important to understand the principles of its work and building on them to build a trading system with a special algorithm for opening deals in which signals will be confirmed in one way or another by other analysis methods. Therefore, when working on the ROC indicator, do not rush to enter the position, Look for additional confirmation signals. In addition, remember one more rule, the more false signals there are, the shorter the ROC indicator period and the shorter the working timeframe. Increasing the scale of trade reduces the number of bad deals.

Adding the ROC indicator in MT 4

The ROC indicator is not included in the standard equipment of the MT4 and MT5 trading platforms. In order to add it, you need to copy the indicator files to the appropriate directory on your computer.

If you have MetaTrader 4. Open C: \ Program Files . Next, find the folder for the files of the trading terminal and open it. Go to the directory … \ MQL4 \ Indicators and copy the file / files Price Rate of Change, ROC there.

If you have a MetaTrader 5. Open C: \ Program Files . Next, find the folder for the files of the trading terminal and open it. Go to the directory … \ MQL5 \ Indicators \ Examples and copy the file / files Price Rate of Change, ROC there.

After that, launch the trading terminal. Click Insert / Indicators / Custom . A list of indicators opens. Select Price Rate of Change, ROC.

Option to add ROC indicator No. 2

Add files as above. Then launch MT. By default, the Navigator window is open on the desktop. Select Price Rate of Change, ROC in it, as shown in the figure and drag it onto the chart of the trading instrument.

Indicator parameters Price Rate of Change

Price Change Rate

You can configure the period and indicator calculation method. The calculation method (UsePercent) do not touch, if you change it, the essence will change. ROC will turn into another indicator with other features, you do not need this. RPeriod – you can configure, but it is recommended to use values from 12 to 15. If you take large values, the indicator will also lose a significant part of its properties.

Trading system

You can trade on ROC in several ways:

1. When crossing signal levels 1 or 100 from top to bottom or vice versa, open positions in the direction of the trend;

2. If the market is in a horizontal corridor, then open positions when reaching the upper or lower border of the channel in the opposite direction, when the ROC signals that it is time;

3. If you see a divergence between the Price Rate of Change and the price chart.

Simple trading tactics

Transaction for sale:

1. The market is trending down. You can determine it in different ways, for example, go to the daily chart of a trading instrument and see what happened to the price for the last 10-15 candles. Suppose she fell hard;

2. Return to the hourly chart. Wait until a divergence appears between the chart of the price of the instrument and the indicator;

3. After the divergence appears, place a pending sell order lower by 3-5 points from the minimum price during the divergence period;

4. Close the deal when Price Rate of Change has broken any of its levels from the bottom up.

For a purchase transaction, the reverse is true.

A few simple rules in conclusion

Remember, there are no indicators on Forex that are not mistaken. The Rate of Change of Price (ROC), like any other, requires confirmation of its signals. When building your own trading system, use several indicators.

Follow Mani Management. Never in one transaction risk more than 2 percent of your capital. This approach will protect you from ruin and allow you to consistently make money on Forex with the help of Rate of Change of Price (Price Rate of Change, ROC indicator).

Follow your trading strategy clearly. If according to the strategy of the Rate of Change in Price (Price Rate of Change, ROC) you need to open a deal – open it, if you fix the result – fix it, and it does not matter if you are in the black. Only following the rules of Price Rate of Change, ROC “from and to” will allow you to earn.

ROC indicator for MT4 can be downloaded here

ROC indicator for MT5 can be downloaded here

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To conclude a framework agreement, the client is obliged to confirm that he is familiar with the following risks associated with the conclusion, execution and termination of obligations under the framework and individual agreements:

1. The risk of loss to an individual as a result of changes in foreign exchange rates (currency risk).

2. The risk of loss to an individual as a result of non-performance, untimely performance or incomplete performance by the Forex dealer and (or) the bank in which the Forex dealer account is opened, financial obligations to such an individual in accordance with the terms of the Agreement and Separate Agreements (credit risk )

3. The risk of loss to an individual as a result of a violation of applicable law and (or) internal documents of a Forex dealer by employees of a Forex dealer, a malfunction (failure) of software and hardware of a Forex dealer and (or) individual, a mismatch of software and hardware of a forex dealer to the nature and volume of transactions it conducts, transactions by a third party on behalf of an individual as a result of receipt by such a person randomly or as a result of his deliberate actions of unauthorized access to the possibility of making such transactions on behalf of an individual, carrying out operations by an individual that are not in accordance with his intentions, for reasons related to insufficient experience of working with this individual with software and hardware of a forex dealer and (or) making it random actions, as well as the result of external events (operational risk).

Contracts or financial instruments proposed for conclusion are highly risky and may lead to the loss of the deposited funds in full. Before making transactions, you should familiarize yourself with the risks associated with them.

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