What does Smoothed Rate of Change mean?

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What does Smoothed Rate of Change mean?

Category: Tags: asked June 22, 2012

10 Answers

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Smoothed Rate of Change was first introduced by Fred G Schutzman in Futures magazine, April 1991. The oscillator performs a similar function to the Momentum and Rate Of Change indicators but avoids some of the weaknesses:•Because of the smoothing the indicator is less erratic and gives fewer false signals;•The exponential moving average ensures that the indicator only "barks" once. Smoothed Rate of Change (SROC) first calculates a 13-day exponential moving average of closing price. Then calculate a 21-day Rate of Change of the exponential moving average.

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This indicator, developed by Fred Schutzman, is described in TRADING FOR A LIVING. It is created by calculating the rate of change for an exponential moving average of closing prices. When it changes direction, it helps identify and confirm trend changes.Source :www.elder.com

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Rate of change is often illustrated by the Greek letter delta. Many traders pay close attention to the speed at which one variable changes relative to another. For example, option traders study the relationship between the rate of change in the price of an option relative to a small change in the price of the underlying asset, known as an options delta.

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The ciSROC (Smoothed Rate of Change) indicator is a modification of the traditional ROC, as described in Alexander Elder's book Trading for a Living. It plots two lines: ROC, which is the difference between the current price and the price x-time periods ago, and SROC which is the difference between an MA of price and the MA of price x-time periods ago

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The Smoothed Rate of Change indicator is a modification of the traditional Rate Of Change indicator. Smoothed Rate of Change (SROC) first calculates a 13-day exponential moving average of closing price. Then calculate a 21-day Rate of Change of the exponential moving average.

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Smoothed Rate of Change (SROC) first calculates a 13-day exponential moving average of closing price. Then calculate a 21-day Rate of Change of the exponential moving average.

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Rate of change is often illustrated by the Greek letter delta. Many traders pay close attention to the speed at which one variable changes relative to another. For example, option traders study the relationship between the rate of change in the price of an option relative to a small change in the price of the underlying asset, known as an options delta.

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Developed by Fred G. Schutzman, the smoothed rate of change is different from the typical rate of change by using an EMA as opposed to closing values for computing the rate of change. By using the EMA, as opposed to price, the resulting ROC signal does not succumb to rapid changes triggered by the price.

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Smoothed Rate of Change was first introduced by Fred G Schutzman in Futures magazine, April 1991. The oscillator performs a similar function to the Momentum and Rate Of Change indicators but avoids some of the weaknesses:Because of the smoothing the indicator is less erratic and gives fewer false signals; The exponential moving average ensures that the indicator only "barks" once. See Momentum for more detail. Smoothed Rate of Change (SROC) first calculates a 13-day exponential moving average of closing price. Then calculate a 21-day Rate of Change of the exponential moving average.

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Smoothed Rate of Change is an oscillator which performs a similar function to the Momentum and Rate Of Change indicators but uses the closes of 13 EMA and then uses 21 day Exponential ROC to smooth out false signals.

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