Coppock indicator is a powerful indicator to determine the
duration of the trend and the change in direction of the trend. It gives
excellent signals on larger timeframes - mainly H4 and Daily charts.
The concept behind the Coppock indicator is that in
trending markets, the Rate of Change(RoC) gradually rises (or falls), and when
the trend ends, it tops out or bottoms out accordingly, thus providing
excellent trading opportunities. The Rate of Change is calculated as the
difference between the current value and its previous value, divided by the
previous value. This is expressed in percentage. Coppock indicator employs Rate
of Change using two moving averages, mainly a fast moving average and a slow moving
average.
The logic is that when the market changes from sideways to trending, the rate of change of the fast moving average is greater than the rate of change of the slow moving average. This difference determines the direction and strength of the new trend. The greater the difference, the strong the trend.
In the first step we calculate the moving averages of
the closing price for R1_PERIOD and R1_MODE, and R2_PERIOD and R2_MODE. The
rate of change is calculated for each mode (R1 and R2), between the current
moving average and the value R1_PERIOD and R2_PERIOD ago respectively. This
value is converted to percentage if USE_PERCENT is set to true, or in points.
Finally the sum of the both rates of change is calculated. The Coppock
indicator is the moving average over MA_PERIOD of this sum.
Buy: Place Buy
when indicator has bottomed out below zero level and is rising for at least 2
bars.
Sell: Place Sell
when the indicator has topped out above zero level and is falling for at least
2 bars.
C:\ProgramData\VertexFX Client Terminals\"Company
name"\VTL10\Local VTL Scripts
Then right click on the tree and select refresh or
restart your client station and you will find under VTL local scripts in your client terminal.
You can check this video that talks about Coppock Indicator: