What Is Rate of Change

The price rate of change (ROC) is a technical indicator of momentum that measures the percentage change in price between the current price and the price n periods in the past. 

Rate of Change (ROC) Indicator

The Price Rate of Change (ROC) is a momentum-based technical indicator. It is plotted against 0. The indicator moves upwards into positive territory if price changes are to the upside and moves into negative territory if price changes are to the downside.

How To Calculate The Rate Of Change (ROC)?

Formula:- Rate of change = ((price/prevPrice)-1)*100

Why Use The Rate Of Change

The Price Rate of Change (ROC) is classified as a momentum indicator as it calculates the strength of price momentum by the rate of change. ROC is also commonly used as a divergence indicator that signals a possible upcoming trend change. 

How to Use The Rate Of Change Trading Strategy

Bullish Scenario:- A rising ROC above zero typically confirms an uptrend indicating that the prices are going up hence a bullish trend.

Bearish Scenario:- A falling ROC below zero indicates a downtrend indicating that the prices are going down hence a bearish trend.

Building The Rate Of Change Trading Strategy in Mudrex

Strategy:- 

BUY:- MACD crossesup 0 

SELL:- MACD crossesdown 0

TIME FRAME:- 4Hrs

Creating on Mudrex:- 

We will use 2 ROC indicator blocks- one for selling and one for buying.

For buying, we will use the following settings:-

For selling, we will use the following settings:-

Final Strategy:-

Testing:- 

Running on Binance Futures: BTC/USDT with tick interval of 4H yielded an overall profit of 98.72%

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