Rate of Change
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Description
The Rate of Change is an oscillator measuring the acceleration, or speed change of a trend. It is calculated by dividing a current price by a past price and smoothing with a seven-period moving average. The term is the time between the prices.
A negative Rate of Change with an up-trending market indicates the trend is losing power and the market is coasting in preparation for a reversal. Similarly with a positive Rate of Change and a down-trending market.
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