The Aroon indicator, invented by Chande in 1995 measures trend strength and trend direction in forex trading. The Aroon indicator consists of AroonUp (bullish) and AroonDown (bearish). The indicator typically oscillates between 0 and 100. Aroon readings greater than 70 are considered to be strong while readings below 50 are considered to be weak. Weak readings could indicate the beginning of a new trend.
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Euro Dollar Aroon Daily Chart
Type of technical indicator: Trend + Trend Strength oscillator
Forex signals from Aroon
1. In trending markets
AroonUp crosses AroonDown from below: Look to buy dips in up trends.
AroonDown crosses AroonUp from above: Look to sell rallies in downtrends.
2. In range bound markets
AroonUp crosses AroonDown from below: Look for opportunities to buy near the low of the trading range.
AroonDown crosses AroonUp from above: Look for opportunities to sell near the high of the trading range.
Powerful trading combinations with the Aroon indicator
Always use in conjunction with other analysis tools/indicators to make better trading decisions in the forex market.
Candlestick patterns, chart patterns, trend lines and moving averages.
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