Coppock Curve
factor.formula
R(N1) =
Calculates the price change rate over the N1 period. CLOSE represents the current closing price, and CLOSE[N1] represents the closing price N1 period ago. This formula calculates the percentage change in price over the N1 period, reflecting short-term price momentum.
R(N2) =
Calculate the price change rate in the N2 period. CLOSE represents the current closing price, and CLOSE[N2] represents the closing price N2 periods ago. This formula calculates the percentage change in price within the N2 period, reflecting the short- to medium-term price momentum.
RC(N1,N2) =
Add the price change rates of the N1 and N2 cycles together to comprehensively consider short-term and medium-term momentum. The result is the middle calculation value of the Coppock curve and can be regarded as a combined momentum indicator.
COPPOCK(N1,N2,N3) =
Calculate the N3-period weighted moving average of RC(N1,N2) to get the final Coppock curve indicator. The weight of the weighted moving average will increase over time, making the most recent data points have a greater impact on the curve and reflecting the shift in market trends more timely.
Default parameters:
- :
The short-term price rate of change calculation period is usually set to 14. This parameter defines the lookback window for calculating short-term price momentum.
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The calculation period of the medium- and short-term price change rate is usually set to 11. This parameter defines the lookback window for calculating the medium- and short-term price momentum.
- :
The calculation period of the weighted moving average is usually set to 10. This parameter defines the time span for smoothing the combined momentum indicator RC.
factor.explanation
The Coppock Curve is a momentum indicator used to identify long-term market trends. It measures market momentum by calculating a weighted moving average of the rate of price change over different periods. When the Coppock Curve crosses the zero line from a negative value upward, it is usually seen as a medium-term buy signal, indicating that the market may enter an upward trend. However, this indicator is not suitable for finding sell signals because it focuses mainly on early changes in market trends. The Coppock Curve is more suitable for analysis on a monthly chart and should be used in conjunction with other technical indicators to improve the accuracy of trading decisions. The advantage of this indicator lies in its ability to identify long-term trends, but it should be noted that false signals may occur in volatile markets.