S-RoC indicator will help to enter the market in time
This tool for analyzing the market situation is undeservedly forgotten by many traders. S-RoC indicator can be a good addition to almost any trading strategy. The algorithm of his work is quite simple. It compares the values of exponential moving averages in the current market for an earlier period. The obtained data are presented on the chart in the form of a line curve. It’s displayed in a separate window.
S-RoC installation in the trading terminal
I want to warn you before anything else that there is no such indicator in MT4. So we’re gonna have to download it and install it. You’ll find the right link at the end of the article. I’ll remind you what to do.
Start by clicking on “Open data directory” in the MT4 menu. A window will appear in which you will need to find the “MQL4” folder and “Indicators” in it. That’s where the indicator file should be inserted. After that you should reboot the trading terminal or use the item “Update” in “Navigator”.
Parameters in the settings of this indicator are only two: MAPeriod and ROC_Period. The first one can be used to set the smoothing period. I want to note that if you set it to 1, there will be no smoothing. With the help of the second parameter you can specify the number of the candlestick relative to the current one, the value of which will be used in calculations. By default, these settings are set at levels 13 and 21.
How to use S-RoC in trading
There are two options.
The first of them implies entering the market after the indicator has formed a trough or peak. They are below/above the zero level. But this variant requires serious signal filtering with the help of other analysis tools. Otherwise, you won’t be able to trade effectively.
In the chart it looks like this:
The second, more preferable, variant of using the indicator is connected with divergence tracking. Once it is formed, you can open trades.
This is an example of divergence. As we can see, the sale would bring a very good profit to the trader.
This indicator is a very useful tool in trading. But only if the filter is used. You can also try to change the parameters, but you only need to do it on a demo account.
If you’re interested in S-RoC, you can download it here: