Rate of Change measures the percentage change between the current close and the close period bars ago.

Formula

roc = 100 * (close[t] - close[t-N]) / close[t-N]

Params

period - lookback in bars. Required.

Output

Single column named after your indicator (e.g. 12-bar ROC).

Usage

Momentum filter: only take longs when roc > 0 over a chosen window.
Mean reversion: extreme positive or negative ROC readings can flag exhaustion. Pair with overbought / oversold conditions.
Regime tag: build a custom trend with roc_60 > 5 as bull and roc_60 < -5 as bear.

ROC vs Momentum

Momentum measures the absolute price difference, ROC measures the percentage. ROC is scale-invariant - comparable across symbols with very different prices.

Pitfalls

ROC is reactive but unbounded - a 50% bar will produce a 50% ROC spike that takes period bars to flush. Don't use raw ROC values as price-anchored thresholds without normalizing for the symbol's volatility.