The Volume Rate of
Change (aka VROC) is calculated in the same way as a price ROC,
except it obviously focuses on the ROC of the stock's volume, instead
of the closing price. Many traders believe that significant chart
formations (e.g., breakouts, reversals, tops, bottoms etc) are usually
accompanied by an increase in volume, and the Volume ROC essentially
shows the speed at which volume is changing. Statistical confirmation
of this theory is patchy, and often significant moves can happen
in any kind of volume conditions making it a highly subjective indicator,
particularly for day trading systems.
To calculate the Volume
Rate Of Change take the volume 'n' periods ago from the present
volume, divide by the volume 'n' periods ago, and multiply the whole
thing by 100. The Volume Rate of Change can be a negative number.