Day Trading Online Home Page  

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.

previous next