Coppock Curve Metals Analysis & Coppock Curve Trading Signals

Created by Edwin Sedgwick Coppock

This metals technical indicator was used for technical analysis of Metal & Commodities in the beginning but was later used to trade Metals.

The principle behind this is the psychology of trading, based on the theory that human habit is predictable. And metals price movement always oscillates in a zigzag manner.

The principle of adaptation-level applies to how metals price reacts at certain levels, metals and metals prices will react in the same way or pattern as those observed historically.

Metal Trading Analysis & Generating Trading Signals

In metals trading, The moving average is the simplest form of an adaptation-level, the metals price will oscillate around the moving average. This forms the basis of this indicator, which is a longer term oscillator based on this adaptation-levels(moving average), but in a different way.

Oscillators usually begin by calculating a % change of the current metals price from some previous metals price point, where the previous metals price point is the reference point (adaptation-level).

Edwin Coppock reasoned that the metal market participants' emotional state could be quantified by summing up the % changes over the recent past to get a general sense of the metal market's longer term momentum.

For example, If we compare metals prices relative to a year ago and we see that this month the metal market is up 20% compared to a year ago, last month it was up 15% over a year ago, & 10%, 7.50% and 5% respectively the months before that, then we might ascertain that the metal market is gaining momentum.

Basic signals can also be generated using the Coppock Curve to trade market reversals from extreme metals price levels. Looking for divergence and metals trend line breaks may also be combined to confirm the signal.

Implementation

The input levels of this indicator might need to be adjusted to better fit the dynamic nature of the metal markets trading.

Coppock Curve has a zero line reference point, but this does not represent the adaptation-level but it's only a visual reference point only.