The rate of change indicator roc is an indicator to compare the closing price of the day with the closing price before a certain period of time. This indicator is more suitable for use in the futures market. So, what are the application skills of roc indicators? So today, Bian Xiao is here to sort out the stock-related knowledge for everyone. Let's have a look!
Application skills of roc index
When 1 and roc cross the 0-axis from bottom to top, it shows that many forces have increased and entered a strong area, which is a buying signal. On the other hand, when roc crosses the 0 axis from top to bottom, it shows that the rising kinetic energy is transformed into the falling kinetic energy, and the market enters the weak zone, which is a selling signal.
2.roc is above the 0-axis or rising continuously, indicating that the market is in a strong position, and the share price with multiple advantages will continue to rise, which is a shareholding signal. If the roc is below the 0 axis or continues to fall, the market will be in a weak position, and the leading share price of the empty side will continue to fall, which is a signal to hold money.
3.roc turned down when it was far away from the top of the 0-axis, indicating that the power of stock price rise began to dry up, and short-term peaking was a short-term selling signal. Roc runs away from the bottom of the 0-axis, indicating that the kinetic energy of stock price decline is weakened, and the short message bottoms out, which is a short-term buying signal.
4. When the stock price hits a new high and roc fails to cooperate with the rise, it means that the kinetic energy of the rise is insufficient, so beware of the stock price reversing downward. However, when the stock price hit a new low, roc failed to cooperate with the decline, indicating that the downward momentum is insufficient, so we can consider absorbing on dips.
5. If the stock price rises synchronously with roc at a low level, or there are signs of rebound in the short term; If the stock price and roc fall synchronously at a high level, or there are signs of decline in the short term.
In practice, roc index can not only help us to effectively identify the running state of the trend, but also help us to carry out short-term high-selling and low-sucking operations. Using ROC indicators for trading operations can greatly increase the odds of investors.
What does roc index mean?
Roc index belongs to momentum index, which is an index to study the short-term and medium-term price changes of stocks. Roc index compares the closing price of a certain day with the closing price of the previous day, and measures the momentum of the price by comparing the price trend, so as to detect the strength of supply and demand in stock price trading in advance.
As for roc indicators, what do you think? When the roc indicator falls below 0 from top to bottom, it is a selling signal, and when the roc indicator breaks through 0 from bottom to top, it is a buying signal; When roc indicator falls below maroc from top to bottom, it is a selling signal, and when roc indicator breaks through maroc from bottom to top, it is a buying signal.
Roc indicator parameter value setting
It is understood that although stock trading is a relatively high probability thing, the use of key indicators is still very important. Correct use can improve the accuracy of roc index. The buying pattern first needs to meet four conditions. The first is that the previous increase is not higher than 50%. The second is that the increased time needs to be proportional to the end time. The third is that it needs to be applied to the bollinger Band. At this time, we need to pay attention to whether the lowest point at the bottom is close. Fourthly, the ROC indicator developed a second golden fork at the low position of the chassis. This is the best time to buy.
The selling form needs the first condition (you can refer to the price of Tsingtao Brewery around 5.2 1). The first thing is whether the main moving average is smooth. Of course, the sale of this ROC indicator often needs to be combined with the bollinger band, so we also need to observe the smoothness of the bollinger band to see if it can maintain smooth consistency.
As for the roc index parameter value, how good is it? The optimal parameter setting of roc index is generally three overbought lines, the first is overbought line (parameter value 5- 10), the second is overbought line (parameter value 12- 17), and the third is overbought line (parameter value 18-35).