Rate of Change Percentage (ROCP)

Overview

The Rate of Change Percentage (ROCP) calculates momentum using the straightforward formula: [(Current Price - Price n Periods Ago) / Price n Periods Ago] × 100. This creates an oscillator that fluctuates above and below zero, with positive values indicating upward momentum and negative values showing downward momentum. Developed by Morton Baratz in the late 1940s as one of the first momentum oscillators, ROCP represents momentum in its purest form - the percentage change in price over time. Its simplicity and effectiveness have made it a cornerstone indicator for over seven decades.

What makes ROCP particularly valuable is its intuitive interpretation and unbounded nature. The percentage format allows traders to immediately understand momentum strength - a reading of +10 means price has risen 10% over the lookback period, while -5 indicates a 5% decline. While theoretically unlimited on the upside (prices can rise indefinitely), ROCP has a natural floor at -100% since prices cannot fall below zero. The indicator accelerates into positive territory during strong advances and plunges deeper negative during sharp declines, providing clear visual representation of momentum shifts that often precede trend changes.

Interpretation & Trading Signals

Example Usage

Code examples will be available once the Rust implementation is complete.