Smoothed Rate of Change
This is a powerful addition to your MetaTrader 5 toolkit designed to optimize market analysis and performance. This technical indicator acts as a specialized analysis tool designed to visualize market data. It helps traders identify emerging trends, momentum shifts, and key support or resistance levels by plotting statistical calculations directly onto price charts.
How to Setup and Use Smoothed Rate of Change
1. Installation: Place your file in the MQL/Indicators folder via "Open Data Folder" and restart your terminal.
2. Loading: Find the indicator in the Navigator, drag it onto your chart, and configure the input parameters in the popup window.
3. Customization: Press Ctrl+I to open the indicator list, select your tool, and click "Properties" to change colors, levels, or visual styles.
4. Updating: Replace the old file in the Indicators folder with the new version and restart the platform to apply changes.
Frequently Asked Questions
Q: Why is my indicator not showing? A: Verify the file is in the MQL/Indicators folder, or try right-clicking the "Indicators" tree in the Navigator and clicking "Refresh."
Q: Do custom indicators slow down the platform? A: Too many complex indicators can impact performance; remove unused ones via the "Indicator List" (Ctrl+I).
Q: Can I use MT4 indicators on MT5? A: No, MQL4 and MQL5 are distinct languages; ensure the indicator is compiled specifically for your platform version.
Description & Settings
Smoothed Rate of Change (Smoothed-RoC) is a refinement of Rate of Change (RoC) indicator that was developed by
Fred G Schutzman
. It differs from the RoC in that it based on Exponential Moving Averages (EMAs) rather than on price closes. Like the RoC, Smoothed RoC is a leading Momentum indicator that can be used to determine the strength of a trend by determining if the trend is accelerating or decelerating. The Smoothed RoC does this by comparing the current EMA to value that the EMA was a specified periods ago. The use of EMAs rather than the price close eliminates the erratic tendencies of the RoC.
RoC is calculated in three steps. First, the EMA is calculated. Then the Momentum of the change in the EMA is calculated by subtracting the previous value of the EMA from the current EMA. Finally, the result is divided by the previous value of the EMA and multiplied by 100 to give a percentage. As the Smoothed-RoC is a RoC of EMA, it takes two periods:
EMA period (13 by default).
RoC period (21 by default).
The formula is:
Smoothed-RoC = (Current EMA - Previous EMA) / (Previous EMA) x 100
where the previous EMA is the value that the EMA was at specified period ago. The result is a percentage that is plotted as an oscillator that oscillates between 100% and -100%.
As with the RoC oscillator, the key consideration when using Smoothed-RoC is the center line. When the price of the underlying security is in an uptrend, a buy signal is generated when the Smoothed-RoC falls below its center line and starts to turn back up. When the price of the underlying security is in a downtrend, a sell signal is generated when the Smoothed-RoC moves above its center line and starts to turn back down.
