What is the Coppock Curve?

What is the Coppock Curve?

The Coppock Curve is a long-term momentum indicator originally designed for equity markets to spot significant bottoms. Forex traders adapt it to identify when a major downtrend may be ending.

How the Indicator Works

• Calculation: Weighted moving average of the sum of two rate-of-change values (commonly 14 and 11 months).
• Signal line: Rising through zero suggests a potential long-term upturn.
• Focus on weekly/monthly charts: The indicator is too slow for intraday use.
• Best for confirmation: Combine with other tools rather than using it alone.

Trade Considerations

• Use higher timeframes: Weekly or monthly data provides reliable signals.
• Confirm with price action: Look for break of structure or higher lows.
• Manage expectations: Signals can be early; allow time for follow-though.
• Risk control: Even long-term signals need stop-loss plans.

Deep Dive

Most edges come from applying clear rules consistently. Expand your analysis beyond a single signal: add context from higher timeframes, recent volatility, session behavior, and catalysts. Define invalidation so a trade becomes obviously wrong fast, keeping losses small while letting winners compound.

Trader Checklist

• Higher‑timeframe bias aligns with the setup.
• Clear level or zone for entry with confluence.
• Pre‑defined stop beyond structure; 2–3R target.
• Session/liquidity supports follow‑through.
• No imminent high‑impact news unless planned.

Strategy Ideas

• Combine structure with momentum confirmation (break/close/acceptance).
• Use partials: scale out at first target; trail remainder.
• Journal results by session and pair to refine timing.

Risks and Limitations

• Thin liquidity widens spreads and distorts signals.
• False breaks around obvious levels—wait for acceptance.
• Overfitting indicators; keep the process simple and robust.

Example

Map bias on the daily chart, mark a zone, and wait on 1H for a close back above with rising participation. Enter on the retest; stop beyond the invalidation wick; target prior swing with room for extension. Record the outcome and context to iterate.