Aroon Indicator CFD Technical Analysis and Aroon Indicator CFD Signals

Developed by Tushar Chande

This cfds technical indicator is used to determine if a instrument is trending or not.

It is also used to indicate how strong the cfd trend is.

It is also used to spot the starting of a market trend, the name its name which means morning or dawn.

This cfds technical indicator has two lines:

• Aroon UP
• Aroon DOWN

Aroon UP

Percentage of time between the start of a time period and the highest point that cfd price has reached during that period.

If cfd price sets a new high, Aroon UP will be 100 - for each new high it will stay at 100. However, if cfd price moves down by a certain percentage, then that percentage is subtracted from the 100 and Aroon UP starts to move down. This means that if Aroon UP stays at 100 then cfd price is making new highs but when it starts to move down then cfd price is not making new highs.

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

Calculation

Aroon UP is a percentage of time between cfd price period and highest point.

If you use 10 cfd price periods for calculation:

Example 1: Highest cfd price was 1 day ago

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

10 cfd price periods minus 1 day= 9

9/10 in percent terms = 90

Aroon UP will be at 90

Example 2: Highest cfd price was 5 days ago

If the highest point was 5 days ago then

10 cfd price periods minus 5 = 5

5/10 in percent = 50

Aroon UP will be at 50

Aroon DOWN

This is calculated the same as Aroon UP but this time using lowest point instead of highest point.

When a new low is set Aroon DOWN is at 100 and when a new high is set it will move to zero.

CFDs Technical Analysis & Generating CFD Signals

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

Buy CFD Signal & exit signal

Aroon UP above 50 is a technical buy signal

Aroon UP dipping below 50 is an exit signal if you had opened a buy cfd trade transaction.

Sell CFD Signal & exit signal

Aroon DOWN below 50 is a technical sell trading signal.

Aroon DOWN rising above 50 is an exit signal if you had opened a sell cfd trade transaction.

Buy & Sell CFD Signals