The Coppock Curve strategy is a long-term trading method designed to identify major buying opportunities by spotting deep market bottoms. Originally created for stock market indices, this indicator is now applied across different asset classes to catch the early stages of major bull trends.

Coppock Curve strategy techniques allow traders to capture powerful trend reversals, filter out market noise, and enter trades with a focus on long-term momentum shifts.

What is the Coppock Curve?

The Coppock Curve is a momentum indicator developed by economist Edwin Coppock. It is based on the rate of change (ROC) of an asset over two time periods, smoothed with a weighted moving average (WMA).

Key elements:

• Coppock Curve Rising from Below Zero:
  Signals a long-term buy opportunity.
• Coppock Curve Falling from Above Zero:
  Originally ignored, but some traders use it as an early warning of potential trend weakness.

In short, the Coppock Curve shows when markets are recovering from deeply oversold conditions, offering reliable signals for major uptrends.

How to Trade the Coppock Curve Strategy

Step 1: Add the Coppock Curve to Your Chart

• Standard settings:
  • 10-period Weighted Moving Average of (14-period ROC + 11-period ROC).

Step 2: Interpret Coppock Curve Signals

• Buy Signal:
  When the curve turns upward from below the zero line.
• Sell Signal (optional for active traders):
  Some use a downward turn above zero as a warning, but it is not part of the original method.

Step 3: Confirm with Price Action

• Validate Coppock signals with chart patterns, support/resistance, or trendline breaks.

Step 4: Set Entry, Stop Loss, and Take Profit

• Entry:
  After the Coppock Curve turns up from below zero and price confirms with a higher low or breakout.
• Stop Loss:
  Below the recent swing low.
• Take Profit:
  Using major resistance levels, trailing stops, or holding for long-term trend growth.

Step 5: Manage the Trade

• Use trailing stops to lock in profits as the trend develops.
• Exit partially at major resistance levels if needed.

Advantages of the Coppock Curve Strategy

1. Captures Major Bullish Reversals
Designed specifically to catch the start of long-term uptrends.

2. Filters Out Short-Term Noise
Best suited for weekly or monthly charts where noise is minimal.

3. Simple to Interpret
Only one main signal: curve turning up from below zero.

4. Ideal for Long-Term Investors
Helps investors and position traders align with large market cycles.

5. Proven Historical Effectiveness
Widely respected by market historians and technicians.

Challenges of Trading the Coppock Curve

Limited Signals
Signals occur infrequently, sometimes only once every several months.

Lagging Nature
Being a smoothed indicator, it reacts after price bottoms are formed.

Not Suitable for Short-Term Trading
Designed for multi-month or multi-year trends.

Requires Patience and Discipline
Holding positions over long periods demands emotional resilience.

Simple Example of a Coppock Curve Trade

Element	Example Details
Setup	Coppock Curve rises from below zero
Confirmation	Price breaks a major resistance zone
Entry	Buy after breakout confirmation
Stop Loss	Below recent major swing low
Target	Hold until Coppock Curve flattens or falls
Risk-to-Reward Ratio	Often higher than 1:3

The trader uses the Coppock Curve and price breakout to capture a major bull move.

Best Practices for Trading the Coppock Curve

• Use on Higher Timeframes:
  Best results come from weekly or monthly charts.
• Combine with Technical Confirmation:
  Validate signals with breakouts, moving averages, or pattern completions.
• Be Patient:
  Trades often take months or years to play out.
• Manage Risk Carefully:
  Use logical stop-loss placements and consider scaling out if volatility increases.
• Track Major Economic Cycles:
  Align trades with macroeconomic recovery phases when possible.

Common Coppock Curve Trading Mistakes to Avoid

Mistake	How to Overcome
Forcing trades on small timeframes	Stick to weekly or monthly charts.
Ignoring price confirmation	Always validate with technical breakouts or trend reversals.
Exiting too early	Allow time for trends to fully develop.
Using the curve for frequent trading	Remember it’s built for major trend changes, not daily signals.

Avoiding these mistakes helps fully leverage the power of the Coppock Curve.

Examples of Coppock Curve Strategy in Practice

• S&P 500 Weekly Chart:
  After the 2008 financial crisis, the Coppock Curve turned upward from below zero — signalling a new bull market that lasted years.
• EUR/USD Weekly Chart:
  Coppock Curve rose from below zero during 2017, capturing a long bullish trend across the year.

Both examples show how the Coppock Curve can pinpoint major market reversals effectively.

Conclusion

Patience and timing are everything in trading. By mastering the Coppock Curve strategy, you can identify major bullish turning points, ride long-term trends, and make trades with higher conviction and reduced noise.

If you are ready to master trend-following strategies, refine your long-term trading skills, and build professional investment systems, explore our Trading Courses and start trading smarter with the Coppock Curve today.