Rate of Change Ratio (ROCR)

Overview

The Rate of Change Ratio (ROCR) represents momentum in its purest form by calculating the simple ratio of current price to price n periods ago. Unlike the percentage-based ROC indicator, ROCR expresses momentum as a ratio where ROCR = Current Price / Price n Periods Ago. This creates an oscillator centered at 1.0 rather than zero - values above 1.0 indicate the current price is higher than n periods ago (bullish momentum), while values below 1.0 indicate the current price is lower (bearish momentum). This ratio format makes ROCR particularly useful for comparing momentum across instruments with vastly different price scales.

The simplicity of ROCR belies its effectiveness as a momentum indicator. By expressing price change as a multiplicative factor, it provides intuitive readings - an ROCR of 1.10 means price has increased by 10%, while 0.90 indicates a 10% decrease. This direct relationship makes ROCR valuable for systematic trading strategies and cross-market comparisons. The indicator accelerates away from 1.0 as momentum increases, providing clear visual representation of trend strength. While theoretically unbounded on the upside, ROCR has a natural floor at zero, as prices cannot fall below zero.

Interpretation & Trading Signals

Example Usage

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