Coppock Indicator Signals from Smoothed Long- and Short-Term Momentum
Summary
The Coppock indicator combines two rates of change, typically measured over 14 and 11 months, then smooths their sum with an exponential moving average, commonly over 10 months. The document traces its origin to E. Coppock in the 1960s and describes its initial use for long-term investment decisions. Its central signal is a change in the indicator’s direction; histogram crossings above or below zero are also presented as potential long or short triggers.
A further approach pairs the indicator with a five-period exponential moving average: the relative position of the average and histogram guides buying or selling. These are proposed technical rules, not demonstrated results. The document supplies no comparison, backtest, or discussion of transaction costs, and the indicator’s long lookback means signals may respond slowly to changing market conditions. It also mentions configurable smoothing and price inputs, but does not establish that any parameter set works across markets or timeframes.
Key ideas
- The Coppock indicator smooths the sum of two price rate-of-change measures.
- Typical lookbacks are 14 and 11 months, with a 10-month exponential average.
- A turn in the indicator or a zero-line crossing can be used as a trading signal.
- A five-period exponential moving average is suggested as an additional signal guide.
- The document gives rules but no backtest or evidence of performance across markets.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.