Rate Change

It plays the role of apointerused in the technical analysis. The general logic behind Rate of Change is similar logic that motivates momentum: a change in cost levels with moving time, or trend line slope. However, the rate of change is different from momentum in focusing traders on time. It is generally used for measuring the rate of change whereas the momentum value depends on the trendline selectedby the analysts on the used time period. This rate of change is measured by taking the existing closing cost, separating it by closing costs and them multiplying difference by hundred. The value that that one gets in the form of result is expressed in the form of percentage. Rate of change can be utilized for generating purchasing and selling signals in the similar way as an impetus. If rate of change keeps on increasing, the temporary purchasing pressure is shown.