Aroon Oscillator was developed by Tushar Chande to highlight the beginning of new trends and to measure the strength of the trend. Chande first describes the indicators in the September 1995 issue of Stocks & Commodities magazine. Aroon indicator system consists of three lines: Aroon Up, Down Aroon and Aroon Oscillator which reflects the difference between the two. "Aroon" is a Sanskrit word meaning "light of early dawn. "
Aroon Trading Signals
The Aroon Up and Aroon Down indicator signals the beginning of a new trend. Chande recommends the following signals:
Aroon Up above 70 indicate a strong up-trend.
Aroon Down above 70 indicate a strong down-trend.
Aroon Up under 50 warned that the weakening trend-ups.
Aroon At below 50 signals that the trend-down weakened.
Two low moves near the show consolidation, with no clear tendency.
Trading signals for the Aroon Oscillator:
Above zero is a signal of trend-ups.
Below zero indicate the trend-down.
Further Aroon Oscillator is from the zero line, the stronger the trend.
Examples
CRB Commodity Index is shown with the Aroon Up and Aroon Down. 63-Day Exponential is used as a filter: only take long signals above the moving average and only take short signals below.
1.Go short [S] when the Aroon Down [Red] crosses above 70 and below the price of 63-day moving average.
2.Exit [X] when the Aroon Down retreat below 50
3.Do not go long in because the price is below the 63-day moving average.
The next few months will be shown in more detail.
1.Go short [S] when the Aroon Down [Red] crosses above 70 and below the price of 63-day moving average.
2.Exit [X] when the Aroon Down retreat below 50.
3. Go long [L] when Aroon Up [blue] crosses above 70 and a price above 63-day moving average.
4. Exit [X] when the Aroon Up retreat below 50.
5.Do not go short when the Aroon Down crosses above 70 because the price is above the moving average 63-Day.
7.Go long [L] the next day when the Aroon Up [blue] crosses above 70 and above the Aroon Down.
8.Exit [X] when the Aroon Up retreat below 50.
9.if you must cross the Aroon Up Aroon Down Under while above 50, this will also signal the exit.
10. Do not go short when the Aroon Down crosses above 70 because the price is above the moving average 63-Day. Trade was halted when the price reverses above the moving average of 9 days later.
11.Go long [L] when Aroon Up crosses above 70 and a price above 63-day moving average.
Aroon Setup
The default time period is 25 Days Aroon indicator.
See Indicator Panel for instructions on how to prepare the indicators - and Edit Indicator Settings to change settings.
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