Volume Rate of Change (VROC) – indicator MetaTrader 5

Volume Rate of Change (VROC) is an indicator of the direction where the volume trend moves.

Its idea lies in the fact that almost all important graphical formations (peaks, bottoms, breaches, etc.) are accompanied by a dramatic increase of trade volume.

The indicator is the difference between current bar volume and the volume n periods ago. If the current bar volume is higher than it was n periods ago, the value of the indicator will be positive. If the current volume is lower, VROC will obtain a negative value. Thus, the indicator gives an idea of the volume change speed.

Determining the calculation period is very important while working with this indicator. Short periods of 10-15 bars show sudden changes of volume. However, for signals that are more realistic it is better to choose periods of 25-30 bars. This gives a smoother and more rounded line and makes the analysis easier. At the same time, using short periods gives a more broken, “noisy” line and complicates the analysis.

Volume Rate of Change indicator

Calculation:

where:

• VOLUME (i) – is the current bar volume;
• VOLUME (i – n) – the volume n bars ago;
• VROC – the Volume Rate of Change indicator value.