ROC Pass Node
Rate of Change — Series Input
Overview
The ROC Pass Node computes the Rate of Change on a series input. ROC measures the percentage change in price over a fixed lookback period — normalizing momentum by the starting price to make values comparable across different assets and price levels.
ROC is unbounded: positive values indicate upward momentum; negative values indicate downward momentum; zero indicates no change. Unlike raw momentum, ROC's percentage normalization means a +5% ROC on a $10 stock is comparable to a +5% ROC on a $1000 stock.
Formula
Parameters
| Parameter | Default | Description |
|---|---|---|
| period | 12 | Lookback period for the rate of change calculation |
Inputs & Outputs
| Slot | Direction | Type | Description |
|---|---|---|---|
| input | Input | { values, timestamps } | Price or any numeric series |
| values | Output | (number | null)[] | ROC percentage values (unbounded); nulls during warm-up |
| timestamps | Output | number[] | Unix timestamps aligned to input |
Use Cases
Momentum Ranking
Rank stocks, sectors, or assets by ROC over a fixed period (e.g., 12-month ROC) to build momentum portfolios — buying the top performers and selling the bottom performers.
Zero-Line Crossover Signals
ROC crossing above zero signals bullish momentum; crossing below signals bearish momentum. Smooth with an EMA to reduce false signals in ranging markets.
KST and Coppock Components
ROC is the building block for KST and Coppock Curve — combine multiple ROC periods with different smoothing parameters to create custom multi-cycle momentum composites.
Tips & Best Practices
Classic Momentum Periods
Common ROC periods: 1 day (daily change), 10 days (2-week momentum), 21 days (monthly), 63 days (quarterly), 252 days (annual). Match the period to the holding period of your strategy.
Smooth Before Signaling
Raw ROC is noisy. Apply an EMA of 3–5 periods to smooth the ROC before using for signal generation. This reduces whipsaws without significantly degrading responsiveness.
Divergence Is Powerful
Price making new highs while ROC makes lower highs is a classic bearish divergence. This pattern preceded many major market peaks and is one of the most reliable reversal warnings in technical analysis.