Real author:
Tushar Chande
In the Sanskrit language "aroon" means "dawn's early light". This indicator predicts price changes from trend to flat market conditions.
It can be calculated using the following equation:
Aroon Oscillator = Bearish indicator - Bullish indicator
where:
Bullish indicator = [(N periods - N periods from the greatest maximum / N periods] * 100
Bearish indicator = [(N periods - N periods from the lowest minimum) / N periods] * 100
AroonOscillator analysis includes three main signals.
- Reaching critical values -100 and +100 indicates a strong downward or upward trend.
- Aroon Up = +50 and Aroon Down = -50 levels breakout increasingly or decreasingly respectively indicates beginning of a trend.
- Oscillator position between Aroon Up = +50 and Aroon Down = -50 levels indicates a weak trend or its complete absence.
