Coppock Curve Commodities Technical Analysis and Coppock Curve Trading Signals

Developed by Edwin Sedgwick Coppock

This commodity technical indicator was used for technical analysis of Commodities & Commodities in the beginning but was later used to trade Commodities.

The principle behind this is the psychology of trading, based on the theory that human habit is predictable. And commodities trading price movement always oscillates in a zigzag manner.

The principle of adaptation-level applies to how commodities trading price reacts at certain levels, commodities and commodities prices will react in the same way or pattern as those observed historically.

Commodities Technical Analysis & How to Generate Trading Signals

In commodities trading, The moving average is the simplest form of an adaptation-level, the commodities price will oscillate around the moving average. This forms the basis of this indicator, which is a longer term oscillator based on this adaptation-levels(moving average), but in a different way.

Oscillators usually begin by calculating a % change of the current commodities trading price from some previous commodities trading price point, where the previous commodities price point is the reference point (adaptation-level).

Edwin Coppock reasoned that the commodity market participants' emotional state could be quantified by summing up the % changes over the recent past to get a general sense of the commodity market's longer term momentum.

For example, If we compare commodities trading prices relative to a year ago and we see that this month the commodity market is up 20% compared to a year ago, last month it was up 15% over a year ago, and 10 %, 7.5% & 5% respectively the months before that, then we may determine that the commodity market is gaining momentum.

Basic signals can also be generated using the Coppock Curve to trade market reversals from extreme commodities trading price levels. Looking for divergence and commodity trend line breaks may also be combined to confirm the signal.

Implementation

The input levels of this indicator might need to be adjusted to better fit the dynamic nature of the commodity markets trading.

Coppock Curve has a zero line reference point, but this doesn't represent the adaptation-level but it is only a visual reference point only.