Above 1 up, below it down.
The short answer
- What is the Rate of Change Ratio indicator (ROCR)?
- Rate of Change Ratio: current price ÷ price n periods ago, with n = n.
- When does ROCR get it wrong?
- Same limits as Rate of Change. See its current reading on platform symbols, at the last daily close, in the "Reading now" table on this page. See current reading →
Reading now
| Ticker | Value | Five sessions ago | Status |
|---|---|---|---|
| SPY | 1.02 | 1.01 | Above 1 |
| QQQ | 1.01 | 1.02 | Above 1 |
| IWM | 0.99 | 0.98 | Below 1 |
| DIA | 1.01 | 0.99 | Above 1 |
A description of where the number sits against its thresholds. It is not an entry or exit signal.
Indicator limit
Same limits as Rate of Change.
Read it with
On-Balance Volume: a ratio above 1 is more believable when OBV is rising.
Answers: is momentum changing?
What it actually does
The rate-of-change ratio divides today's price by the price exactly N sessions earlier: 1 means flat, and 1.05 (1.05) means a 5% rise. It carries the same information as the percentage rate of change, written as a ratio instead of a difference.
Why both forms exist
Because each has its own computational use. The ratio form multiplies directly into compounded return series (results of consecutive periods are multiplied, not added), so quantitative system builders who compound returns across multiple windows prefer it. The percentage-difference form is easier for the human eye. There is no dispute in substance: it is computational convenience, not new information.
How to read them in practice
Just like its sibling, with the reference shifted: the 1 here is the zero there. Above it momentum is positive and below it negative, and distance from 1 measures strength. It suits comparative ranking across symbols, exactly like its sibling.
Hypothetical example
A quantitative system that computes 12-month momentum compounded from monthly windows: the monthly change ratios are multiplied together, which gives the compounded return directly. With the difference formula, each step would first have to be converted to ratios. Choosing this formula is choosing the path with the least friction.
Where it goes wrong and why
It inherits all of its sibling's limits: sensitivity to an odd starting point, and silence about whether a move will continue. It is also less intuitive for beginners (1.03 vs. +3%), so it is often converted for display.
Read it with
Like its sibling: relative volume to tell backed strength from hollow, trend strength to classify the environment, and breadth when reading sectors.
Where to see it on the platform
Scanners show momentum in its readable percentage form, and the ratio form works in the internal calculation layers.
A third form in the family
Some platforms show a version multiplied by 100 (ROCR100), so no change reads as 100 instead of 1. It is a display change only and alters nothing underneath. Knowing the three forms (percent change, ratio, percentage) prevents a common mix-up when you move rules from one platform to another: a threshold of "above 1.05" on one platform matches "above 105" on a second and "above +5%" on a third. One rule, three ways to write it.
