Aroon Filter: Trend Direction from Recent Highs and Lows

Summary

Aroon Filter is described as a modified Aroon oscillator that omits the ratio to the calculation period and applies a filter to reduce minor fluctuations. It uses two adjustable inputs: the period over which recent highs and lows are located, and the filter size. The output is the difference between an Aroon Up value based on the position of the period’s highest high and an Aroon Down value based on the lowest low.

The document maps bullish readings to green, bearish readings to red, and filtered or sorted-out values to gray. This gives the indicator a visual role as a trend-direction filter. However, the text does not define the precise filtering threshold or provide entry, exit, or risk rules. It presents no backtest or evidence that the color states improve trading outcomes, so the indicator’s usefulness and parameter choices require independent evaluation.

Key ideas

• Aroon Filter subtracts a Down measure from an Up measure derived from recent price extremes.
• The period controls the range used to locate the highest high and lowest low.
• A separate filter parameter is intended to suppress minor fluctuations.
• Colors communicate bullish, bearish, and filtered states, but no performance evidence is given.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.