But for passive investors, it likely generates too many signals and could lead to overtrading. This makes it very responsive to short-term momentum shifts and turns. This ability to spot momentum changes makes it a leading indicator. The ROC measures momentum and acceleration in price changes. This provides more context and confirms when both short…

Customers find this book to be a great introduction to managing finances, with simple explanations and straightforward advice that’s easy to understand. Adam Shell is a veteran financial journalist who covers retirement, personal finance, financial markets, and Wall Street. While you might make a killing by buying a single hot stock or going all-in on…