Rate of Change (ROC) on a Live Gold Chart

What it shows

Under the price, a separate pane holds the ROC line and a zero line. The line is the percentage change over the chosen number of candles, drawn for every candle once there is enough history behind it.

How Pravex works it out

1. Pick the price to track. Close is the default.
2. Look back Length candles from the current one and take that older price.
3. ROC = 100 × (price now − price Length candles ago) ÷ price Length candles ago.
4. Worked through with made-up numbers: 2,000 nine candles back and 2,030 now gives 100 × 30 ÷ 2,000 = 1.5, so ROC reads 1.5.

Settings

Setting	Default	What changing it does
Length	9	How many candles back the comparison reaches. A short length jumps around with each candle; a long one shows the bigger swing and moves slowly.
Source	close	The price taken at both ends. hlc3 blends the high, low and close of each candle, so a single closing tick moves the percentage less.

How traders read it

The zero line is the main thing to watch. While the line is above it, price sits higher than it did Length candles ago. A cross through zero means the price has just passed the level it had that many candles back.

The height of the line says how fast the move is. A climb from 1 to 4 means the gain over the window is growing even if price looks calm. A line that flattens while price keeps rising says the push is losing size.

Comparing the line’s peaks with earlier ones is the next step. A new price high with a lower ROC high tells you the latest leg gained less than the one before it.

When it misleads

ROC only looks at two prices: now and Length candles ago. Everything between them is ignored, so one big candle leaving the window can drop the line sharply even though nothing happened on the current candle. It also has no fixed ceiling, so there is no built-in overbought line; you have to judge what is high from the instrument’s own history.

Questions and answers

Is a ROC above zero a buy signal?

No. It reports that the source price is higher now than it was Length candles ago, 9 by default, and by how many percent. Whether that gain carries on is a separate question.

Why use ROC instead of Momentum?

Both compare today with Length candles ago. Momentum shows the gap in price units; ROC divides it by the old price and shows percent, so readings from different price levels are comparable.

How many candles should ROC look back on gold?

Pravex starts at 9. On hourly gold that is most of one session; 24 covers about a trading day and 120 about a week. Choose the window that matches the move you want measured.

Is there an overbought level for ROC?

Not in the formula. The line has no ceiling, so a high reading only means something against the market’s own past readings. A 2% hourly ROC is huge for gold and ordinary for a small coin (example figures).

Related: Momentum, Relative Strength Index, Moving Average Convergence Divergence, TRIX, every indicator.