Aroon Indicator
The Aroon Indicator, developed by Tushar Chande, is a trend-identifying tool that helps traders determine how long it has been since the highest high or lowest low within a set period — typically 25 days.
Rather than focusing purely on price levels, the Aroon zeroes in on timing — giving insight into how strong a trend is and whether it’s losing steam.
How the Aroon Works
The indicator is composed of two lines:
- Aroon Up: Measures the number of periods since the last highest high
- Aroon Down: Measures the number of periods since the last lowest low
Both lines fluctuate between 0 and 100.
It’s not just the position of the lines, but how fast and far they move that gives insight into trend momentum.
How Traders Use It
The Aroon Indicator is great for:
- Spotting trend starts early
- Confirming the health of a trend
- Timing entries after pullbacks
- Avoiding choppy or indecisive conditions
Here’s how it’s often applied:
- Enter long when Aroon Up crosses above Aroon Down and stays high
- Go short when Aroon Down dominates and Aroon Up drops off
- Sit out when both lines are flat or tangled — signaling sideways price action
Example Setup
You’re watching a forex pair. After a consolidation zone, Aroon Up suddenly shoots to 100 while Aroon Down plummets. That tells you: the market just hit a new high, and momentum is shifting.
You go long, riding the move while Aroon Up holds strong and Aroon Down stays low. As soon as the lines converge again, you reassess — simple, clean, and reliable.
Network Strength and Ecosystem Growth
Pros
- Identifies trend direction and strength quickly
- Highlights early breakouts or breakdowns
- Easy to read with clear crossover logic
- Great for both swing and longer-term trades
Cons
- Not ideal for scalping or ultra-short timeframes
- Can give false signals in low-volatility ranges
- Works best with structure or price confirmation
When to Use the Aroon Indicator
Use Aroon when you want to spot trends early and stay on the right side of momentum. It’s ideal when markets are transitioning from sideways to directional movement. Whether you’re looking for trend confirmation or just trying to avoid traps, the Aroon Indicator helps you cut through the noise. Next up the Vortex Indicator