What is the Rate of change Indicator?
Rate of change Indicator is a Momentum-based technical analysis tool that helps traders analyse the percentage change in the price from one period to the next.
This indicator helps traders identify the rate at which the prices are oscillating which indicates the potential reversals or the continuation of the trends.
Composition
This indicator is made from a single moving average line which oscillates around the middle line also known as zero line.
Using the moving average line you can identify the potential reversals and potential trends of the security price.
How to apply the Rate of Change Indicator on the Pocket Option?
Pocket Option is a popular trading platform that offers various technical analysis tools, including Rate of Change Indicator & more. Given below is the step-by-step guide on how you can apply the indicator on the trading platform:
1> Login to Pocket Option: The first and foremost step is to log in to your Pocket Option account you can even use your Pocket Option mobile app to get started.
2> Set your default chart: Next, set a default chart to candlestick the rate of change indicator works best with the candlestick chart.
3> Find the indicator: Third, click the indicator button at the top of the page and search for the rate of change indicator in the list.
4> Apply necessary changes: Once you have found and selected the Rate of change indicator next, apply necessary amendments based on your trading requirements you can even change the time period of the moving average line plus indicator line colour.
How to use the Rate of change indicator on the Pocket Option
Here, I assume that you atleast know the basics of candlestick chart in case you don’t know click here. Rate of change indicators are very simple to use and powerful indicator. As I said above, you can use the indicator to find the potential trends and reversals.
This indicator is made from a moving average line which oscillates around a midline also known as a zero line via the moving average line you can identify the upcoming trends and reversals.
When the indicator line is in a rising position below the zero line it signals an upcoming bullish trend and you can use this opportunity to enter the long position and vice versa when the indicator line is in a declining position above the zero line it Signals an upcoming bearish trend and you can use this opportunity to open a short position.
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