What it is
The Aroon indicator is a trend-following tool developed by Tushar Chande. It helps traders identify the beginning of a new trend and its overall strength.
How it works
It consists of two lines: Aroon Up and Aroon Down. These lines measure the time elapsed since the highest high and lowest low within a specific period.
Trading signals
- Bullish: Aroon Up crosses above Aroon Down, suggesting an uptrend.
- Bearish: Aroon Down crosses above Aroon Up, indicating a downtrend.
- Strength: Values near 100 signify a strong trend, while values near 0 indicate weakness.
Basic settings
The standard setting for the Aroon indicator is 14 periods. Traders can adjust this length to match their timeframe, such as using 25 for longer-term analysis. This content is for educational purposes only, not financial advice.
