Coppock Curve on Gold

What it shows

A slow, rounded curve under the candles. No guide line is drawn, yet zero is the one that counts: each time the curve passes through it, the smoothed sum of the two changes has flipped sign.

How Pravex works it out

1. Long rate of change, in percent: 100 × (close − close 14 candles ago) ÷ close 14 candles ago.
2. Short rate of change, the same way over 11 candles.
3. Add the two rates together.
4. Smooth the sum with a weighted moving average over 10 candles, where the newest candle gets the largest weight and the weights step down in a straight line.
5. As a sketch with invented values: if the 14-candle change is +3 and the 11-candle change is +2, the sum fed into the average is +5.

Settings

Setting	Default	What changing it does
Final average length	10	The span of the weighted average that turns the summed changes into the curve. A shorter length follows the sum closely; a longer one gives a smoother, slower curve.
Longer change lookback	14	How many candles back the longer percent change looks. A larger number turns the curve into a slower, bigger-picture line.
Shorter change lookback	11	How many candles back the shorter percent change looks. Keep it below the long one if you want the two to differ.

How traders read it

A cross of the zero line is the reading point. Rising through zero says smoothed momentum turned positive; falling through it says it turned negative.

The curve hooking upward while it is still under zero is the earlier read: the drop is losing speed before the sum has turned positive. That hook was the original buy idea for this curve on monthly index charts.

The size of the curve is in percent of price, so you can compare it between peaks on the same timeframe. At the default 14 and 11 candles on a 1h chart it looks back about a day, which is short.

When it misleads

The weighted average makes the curve smooth, but it also makes it late: a turn shows up several candles after price has already changed course. In a sideways market the curve crosses zero again and again with no follow-through either way. The defaults of 14 and 11 candles are short on a 1h chart, so lengthen them or move to the daily timeframe for slower swings. Gold has no weekend candles, so a Monday gap is counted as one ordinary candle of change.

Questions and answers

What do the 14, 11 and 10 in the Coppock Curve mean?

They are candle counts: the long percent change looks back 14, the short one 11, and the weighted average runs over 10. All three can be changed.

What does it mean when the Coppock Curve crosses zero?

The smoothed sum of the two percent changes changed sign. It says momentum has flipped, not how far price will go.

Is the Coppock Curve a leading or lagging indicator?

Lagging. It is built from past changes and a moving average, so it confirms a turn after it has begun.

Does it work on short timeframes?

It draws on any timeframe, but the defaults are a few hours of candles on a 1h chart. Test a longer setting before you rely on it.

Related: Know Sure Thing, Pring’s Special K, Price Momentum Oscillator, every indicator.