How Do You Analyze Aroon Technical Indicator Analysis?

Aroon Analysis & Aroon Indicator Signals

Developed and Created by Tushar Chandes

This indicator is used to figure out if a financial and trading instrument is trending or not.

It's also used to indicate how strong the market trend is.

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

This indicator has two lines:

Aroon UP
Aroon DOWN

Aroon UP

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

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

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

Aroon Up Indicator Analysis - Aroon Technical Analysis in Forex Charts - Aroon Analysis

Calculation

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

If you use Ten price periods for the calculation:

Example 1: Highest price was a day ago

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

10 price periods minus 1 day= 9

9/10 in % terms = 90

Aroon UP will be at 90

Example 2: Highest price was five days ago

If the highest point was 5 days ago then

10 price periods minus 5 = 5

5/10 in percentage = 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 the 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.

Aroon Down Technical Analysis Examples Explained - Aroon Analysis in Forex Charts

Technical Analysis and How to Generate Trading Signals

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

Buy Trading Signal and exit Signal

Aroon UP above 50 is a technical buy trade signal

Aroon UP dipping below 50 is an exit trading signal if you had bought the currency.

Sell Signal & exit Signal

Aroon DOWN below 50 is a trading sell trade signal.

Aroon DOWN moving above 50 is an exit trading signal if you had sold the currency.

Aroon Buy & Sell Signal Indicator - Aroon Analysis in Forex Charts

Aroon Analysis - Aroon Buy & Sell Signal Indicator

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