Rate of Change Silver Technical Analysis and Rate of Change Trading Signals

ROC Rate of Change indicator is used to calculate how much xagusd price has changed within a specified number of xagusd price periods. It calculates the difference between the current candlestick and the xagusd price of a selected number of previous candlesticks.

The difference can be calculated using Points or Percentages. Rate of Change moves in an oscillation manner, where it oscillates above & below a zero center-line level. Levels above zero are bullish while those below zero center-line level are bearish.

The greater the changes are in the xagusd prices the greater the changes in the ROC.

XAGUSD Trading Technical Analysis & How to Generate Trading Signals

Rate of Change indicator can be used to generate xagusd signals using a number of methods, the most common ones are:

XAGUSD Trading Crossover Trading Signals

Bullish Signal - buy silver signal is generated when the ROC crosses above the zero center line

Bearish Signal - sell silver signal is generated when the Rate of Change crosses below the zero center line.

Overbought/Oversold Levels:

Overbought - The higher the reading the more overbought silver is. Values that are above the overbought level imply that a xagusd price is overbought and there is a pending xagusd price correction

Oversold - The lower the reading the more oversold silver is. Values below the oversold level imply that silver is oversold and there is a pending xagusd price rally.

However, during strong trending markets the xagusd price will remain in the Overbought/Oversold Levels for a long time, and rather than the xagusd price reversing the xagusd price silver trend will continue for quite some time. It is therefore best to use the crossover signals as the official buy & sell silver signals.

XAGUSD Trend-Line Breaks

Silver Trend lines can be drawn on ROC indicator just the same way silver trend lines can be drawn on xagusd price charts. Because The Rate of Change is a leading indicator, the silver trend lines on the indicator will be broken before those on the xagusd price charts. A silver trendline break on the Rate of Change is an indication of a bullish or bearish reversal xagusd trading signal.

• Bearish reversal- Rate of Change readings breaking above a downward silver trendline warns of a likely bullish reversal.
• Bearish reversal- Rate of Change readings breaking below an upwards silver trendline warns of a likely bearish reversal.

Divergence XAGUSD Trading

Rate of Change can be used to trade divergences, and to identify potential silver trend reversal trading signals. There are four types of divergences: classic bullish, classic bearish, hidden bullish & hidden bearish divergence.