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    Coppock Curve

    Definition

    The Coppock Curve helps you gauge the long-term momentum of an asset by combining two different rates of change—one long-term and one short-term—and then applying a weighted moving average to this sum. The curve oscillates around a zero line, providing you with clues about market sentiment.

    Suggested Trading Use

    Here are some practical ways you can use the Coppock Curve in your trading strategy:

  • Identify Bullish Entry Points: When the Coppock Curve crosses above the zero line, it's often considered a bullish signal. This could be an opportune moment for you to consider entering a long position.
  • Spot Market Bottoms: The Coppock Curve is particularly useful for identifying the end of a bear market or a substantial downward move. When you see the curve turning upwards from a low point, it could indicate that the market is recovering and a new upward trend might be forming.
  • Combine with Other Studies: The Coppock Curve can be used in conjunction with other indicators to confirm signals. For example, if you see a bullish signal on the Coppock Curve, you might look for confirming signals on other long-term momentum or trend-following indicators.
  • Avoid Whipsaws: Be cautious about overly rapid fluctuations in the Coppock Curve. These could be false signals and may not necessarily indicate a sustainable change in trend.
  • Be Mindful of Trend Lengths: Since the Coppock Curve incorporates both long-term and short-term rates of change, it can offer a more comprehensive view of an asset's momentum. Make sure to factor in the lengths of these trends when interpreting the curve.

    • The Coppock Curve can be a versatile tool, especially for those focused on long-term trading, helping you to spot potential trend reversals and entry points based on market momentum.