ROC in EasyLanguage — TradeStation & MultiCharts

The Rate of Change is a two-line EasyLanguage study, whether you use the built-in function or spell out the arithmetic. See the explainer for the concept.

What you’ll need

• TradeStation or MultiCharts
• The EasyLanguage / PowerLanguage Editor, new Indicator

The source

{ AlgoGen ROC — TradeStation / MultiCharts }
inputs:
    Length( 12 );

variables:
    ROCval( 0 );

ROCval = RateOfChange( Close, Length );   { percent change over Length bars }

Plot1( ROCval, "ROC" );
Plot2( 0, "Zero" );

if ROCval >= 0 then
    SetPlotColor( 1, Green )
else
    SetPlotColor( 1, Red );

RateOfChange( Close, Length ) returns the percentage change over Length bars — the zero-centered oscillator from the output chart. Colouring by sign makes the momentum regime obvious. (You can also write it by hand: 100 * (Close - Close[Length]) / Close[Length].)

A zero-cross strategy

{ AlgoGen ROC Cross — Strategy }
inputs: Length( 12 ), TrendLen( 200 );
variables: ROCval( 0 );
ROCval = RateOfChange( Close, Length );

{ Only take the zero-cross in the direction of the longer trend }
if ROCval crosses over 0 and Close > Average( Close, TrendLen ) then
    Buy next bar at market;
if ROCval crosses under 0 then
    Sell next bar at market;

Because ROC has no fixed levels, pairing the zero-cross with a trend filter is the sensible way to test it — the Strategy Performance Report will show if it helps.

Gotchas

• Percentage vs difference. RateOfChange is the percent form; Momentum is the absolute difference. Choose deliberately.
• No fixed extremes. ROC is unbounded — don’t hard-code overbought/oversold numbers; judge relative to recent range.
• Manual form. 100 * (Close - Close[Length]) / Close[Length] reproduces the built-in exactly if you want to see the arithmetic.
• Signal line. Average( ROCval, 9 ) gives a smoothed trigger for crossover entries — steadier than the raw line.
• Coppock bonus. ROC scales up: a Coppock-style curve is WAverage( RateOfChange(Close,14) + RateOfChange(Close,11), 10 ) — the famous long-term bottom indicator, built from nothing but ROC and a weighted average.

Same indicator elsewhere: Python, MQL5, Pine Script, NinjaScript. Then backtest it in AlgoGen.

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This post is educational, not financial advice. Indicators describe the past; they don’t predict the future. Backtest anything before you risk real money on it.