Aroon Measures How Recently Price Reached Period Highs and Lows

Summary

Aroon is presented as a trend-strength indicator developed by Tushar Chande in 1995. It uses two lines: Aroon Up tracks the timing of the highest price within a selected period, while Aroon Down tracks the timing of the lowest price. Each line expresses that timing as a percentage of the lookback period, so recent extremes produce stronger readings and older extremes produce weaker ones. The document also identifies the calculation period and overbought and oversold levels as adjustable settings.

The description says Aroon can help assess an existing trend and spot possible changes in direction. It provides calculation expressions involving the period, a bar position, and the positions of the maximum and minimum, but does not define those position variables or explain how to interpret line crossings or threshold values. No chart examples, trading rules, backtests, or performance evidence are supplied, so the indicator is best understood here as a timing and trend assessment tool rather than a validated standalone strategy.

Key ideas

• Aroon has separate lines for the timing of period highs and lows.
• Each line expresses the age of its corresponding extreme relative to the selected lookback period.
• The document suggests using Aroon to assess trend strength and possible direction changes.
• The calculation period and overbought and oversold levels can be adjusted.
• The document gives no tested entry rules or performance evidence.

Tags

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