Calculating Absolute and Relative Rate of Change from Stochastic

Summary

This indicator calculates the rate of change of a selected stochastic line rather than directly applying ROC to closing prices. Users can choose the stochastic %K or %D line, set its periods, slowing, calculation method, and price field, then select a ROC lookback and absolute or relative calculation. The relative form scales the change by the previous stochastic value and expresses it as a percentage; the absolute form records the difference between current and prior readings.

The document distinguishes these outputs from conventional price ROC, which compares closing prices across a lookback period. It names the configurable inputs and shows absolute and relative examples, but supplies no trading rules, performance tests, or guidance on parameter selection. Its value is therefore as an indicator definition and calculation description, not evidence of a profitable strategy.

Key ideas

• The indicator computes rate of change from a chosen stochastic line.
• The stochastic inputs control the oscillator calculation, while a separate lookback sets the ROC interval.
• Absolute ROC is the difference between current and prior stochastic readings.
• Relative ROC divides that difference by the prior reading and expresses it as a percentage.
• The document describes an indicator, not a tested trading strategy.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.