Aroon Analysis and Aroon Bitcoin Indicator Signals

Created by Tushar Chande

This BTCUSD indicator helps determine whether a financial and trading instrument is in a trending state.

It is also used to show how strong the bitcoin trend is.

Monitoring market trends can help detect momentum shifts effectively using specialized tools named for the early stages of a trend cycle.

This btcusd indicator has 2 lines:

Aroon UP Indicator
Aroon DOWN Trading Indicator

Aroon UP Indicator

It's the percentage of time from a period's start to the moment Bitcoin's price hit its highest in that time.

If bitcoin price sets a new high, Aroon UP Technical Indicator will be at 100 - for each new high it'll stay at 100. However, if btcusd price moves down by a certain percentage, then that percentage is subtracted from the 100 & Aroon UP Indicator starts and begins to move down. This means that if Aroon UP Indicator stays at 100 then bitcoin price is making new highs but when it starts and begins to move down then bitcoin price isn't making new highs.

If however bitcoin price is making new lows for a particular bitcoin price period then Aroon UP Indicator will be at zero

Aroon Up Indicator for Bitcoin - Analyze Aroon on BTCUSD Charts - Aroon Tool for BTCUSD Trading

Calculation

The Aroon UP Indicator reflects the percentage of time between the Bitcoin price period and its highest point.

If you use 10 bitcoin price periods for calculation:

Example 1: Highest bitcoin price was 1 day ago

Then if the highest point was yesterday, i.e. 1 day before then

10 bitcoin price periods minus 1 day= 9

9/10 in percentage terms = 90

Aroon UP Indicator will be at 90

Example 2: Highest bitcoin price was 5 days ago

If the peak occurred 5 days ago then

10 bitcoin price periods minus 5 = 5

5/10 in percentage = 50

Aroon UP Trading Indicator will be at 50

Aroon DOWN Indicator

The calculation for this is identical to the Aroon UP Indicator, but utilizes the lowest recorded point instead of the peak point.

When a new low is established, the Aroon DOWN Indicator peaks at 100, and it drops to zero upon reaching a new high.

Application of the Aroon Indicator for Bitcoin Analysis in BTC/USD Charts

Bitcoin Analysis & Generating Signals

This btcusd indicator uses the 50% level to measure momentum of the trend.

Buy Bitcoin Signal and exit signal

Aroon UP Indicator above 50 is a technical buy bitcoin signal

If the Aroon UP Indicator drops beneath the 50 threshold, this serves as an exit directive if you were currently holding a long (buy) position on bitcoin.

Sell Bitcoin Signal and exit signal

Aroon DOWN Indicator below 50 is a technical sell bitcoin trade signal.

Aroon DOWN Indicator growing above 50 is an exit sign if you had opened a sell bitcoin trade.

Aroon Bitcoin Indicator - Aroon - Place Aroon in Chart

Buy & Sell Signals

Additional subjects and instructional materials: