"we are extremely excited to offer our research studies, reports and software on the bloomberg professional system. we believe our trading discipline through the technical observation of our advanced bias, setup and trigger measures dovetails nicely with the advantage of knowing who is getting squeezed ." Phil Erlanger, CMT & president of Phil Erlanger Research Co., Inc.

take our video tour of EROC:

 

Erlanger Rate-Of-Change (EROC):

The Erlanger Rate-Of-Change is the quintessential momentum indicator designed as both a setup and a trigger tool. It is specifically designed to show timely divergences that other momentum or rate-of-change indicators omit. It can be used on any time interval. It includes a signal line. The line shading is green when the EROC is above the zero level and red when it is below the zero level.

SETUP STRATEGY: Setup strategies are patterns in an indicator that typically precede a change in price. The EROC is best used as a setup when it diverges from the price action, especially at extreme levels o f the EROC (see dotted lines in the above chart.) For instance, a failure of the EROC to confirm a higher high in price is a setup for a downside reversal. When the EROC fails to confirm a lower low in price, a setup for a rally reversal is in order. Once a setup is observed, the EROC can also be used as a trigger into a trade.

TRIGGER STRATEGY: Trigger strategies are patterns in an indicator that typically point to a time to execute a trade. Triggers are best executed following appropriate setup patterns. There are two ways to use EROC as a trigger:

When the EROC moves above/below the signal line is the standard trigger for a long/short trade (see arrows in the above chart.) Another trigger for a long trade is when the EROC moves above the zero level. A particularly strong long trigger is when both occur at the same time. When the EROC moves below the signal line is the standard trigger for a short trade. Another trigger for a short trade is when the EROC moves below the zero level. A particularly strong short trigger is when both occur at the same time.

 

 

 

 

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