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How Is The Volume Rate Of Change Best Used In Technical Analysis? We Spell It Out

Written by Lawrence PinesUpdated Cited by Forbes, The Guardian, Stanford University +48+ more

The Volume Rate of Change shows how quickly trading volume is rising or falling, helping commodity traders spot momentum shifts and confirm breakouts before price moves.

The Volume Rate of Change indicator measures the percentage change of current volume as compared to the volume a certain number of periods ago.

The Volume Rate of Change indicator might be used to confirm price moves or detect divergences. The formula for Volume Rate of Change is expressed below:

  • [(Current Volume / Volume n periods ago) – 1] x 100

Generally, the Volume Rate of Change is calculated based on 14-periods for input n, but of course can be modified to any trader preferred period. A chart of the 100 ounce Gold futures is shown below with the 14-day Volume Rate of Change indicator:

 
Time Series Forecast
 

As the price of Gold was increasing, the Volume Rate of Change indicator was increasing as well, suggesting that there was buying interest as prices were rising.

When Gold broke above trendline resistance, the Volume Rate of Change indicator surged higher, suggesting that buyers were extremely interested in buying Gold.

The section discussing how traders typically interpret Volume would be an excellent next step (see: Volume) to read.

Table of Contents show

How to Get Started Trading

Further Reading on Momentum Indicators

These momentum tools complement Volume Rate of Change: ADX Indicator, Directional Movement Index (DMI), and Relative Strength Index (RSI).

Technical analysis is most widely used in CFD and forex trading. If you’re ready to apply these techniques, browse our vetted CFD brokers or forex brokers.

Top CFD brokers on Commodity.com:

Plus500eToroXTB

Update history

This page was revised 5 times between August 2020 and April 2026.

Added contextual cross-references to CFD and forex broker listings in Further Reading section.

Reorganized closing sections by separating broker information from a new dedicated momentum indicators reading list, and added specific tool references (ADX, DMI, RSI).

Added content alert call-to-action element before Further Reading section.

Reorganized opening content by moving the indicator definition to a separate introductory paragraph and streamlining the Gold example narrative.

Removed disclaimer paragraph about trading risks and liabilities.

Show all 5 updates (2 more)
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Lawrence Pines
Written by
Lawrence Pines
Author

Lawrence Pines holds a BA in Philosophy from Princeton University and has spent over 25 years trading equity and foreign exchange options on the NYSE, CBOE, and Pacific Stock Exchange. His career spans the trading desks of Chase Manhattan Bank, Bank of New York, and Lehman Brothers, where he worked as an investment banking analyst. Since founding his consulting firm in 2011, Lawrence has advised hedge funds, mutual funds, and law firms on derivatives and capital markets - and served as an expert witness in US Federal Court trials related to the Bernie Madoff Ponzi scheme. At Commodity.com, he writes on technical analysis, trading strategies, and commodity market dynamics.

View all articles by Lawrence Pines →