Rate of Change (Volume)

Rate of Change Volume (ROCV) is an oscillator applied to volume rather than price and is calculated in the same manner as the Rate of Change (Price) indicator.

ROCV highlights increases in volume, which normally occur at most significant market tops, bottoms and breakouts.

Example

Procter and Gamble Corporation plotted with  5 day Rate of Change (Volume).

Observe the major spikes in volume:

1. On entry into the trading range.
2. When price makes a new peak during the range.
3. On an upward breakout from the range.

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Formula

First, decide on the number of periods (n) over which to calculate the indicator. This will depend on the time frame that you are analyzing.

Then calculate the Rate of Change (Volume) formula:
           ( Volume [today] - Volume [n days ago] ) / Volume [n days ago]

Setup

See Indicator Panel for directions on how to set up an indicator.

The default ROC window is 12 days. To alter the default settings - Edit Indicator Settings.

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