Aroon CFD Indicator Technical Analysis & Aroon CFD Technical Indicator Signals

Developed by Tushar Chande

This cfd indicator is used to determine if a trading instrument is trending or not.

It is also used to indicate how strong the cfd trend is.

It is also used to identify the starting of a trend, the name its name which means morning or dawn.

This cfd indicator has two lines:

• Aroon UP
• Aroon DOWN

Aroon UP

Percentage of time between the start of a time period and the highest point that cfds price has reached during that period.

If cfds price sets a new high, Aroon UP will be 100 - for each new high it will stay at 100. However, if cfds price moves down by a certain percentage, then that percentage is subtracted from the 100 and Aroon UP starts to move down. This means that if Aroon UP stays at 100 then cfds price is making new highs but when it starts to move down then cfds price is not making new highs.

If however cfds price is making new lows for a particular cfds price period then Aroon UP will be at zero

Calculation

Aroon UP is a percentage of time between cfds price period and highest point.

If you use 10 cfds price periods for calculation:

Example 1: Highest cfds price was 1 day ago

Then if the highest point was yesterday, i.e. 1 day before then

10 cfds price periods minus 1 day= 9

9/10 in percent terms = 90

Aroon UP will be at 90

Example 2: Highest cfds price was 5 days ago

If the highest point was 5 days ago then

10 cfds price periods minus 5 = 5

5/10 in percent = 50

Aroon UP will be at 50

Aroon DOWN

This is calculated the same as Aroon UP but this time using lowest point instead of the highest point.

When a new low is set Aroon DOWN is at 100 & when a new high is set it will move to zero.

CFDs Technical Analysis & How to Generate CFDs Signals

This cfd indicator uses the 50% level to measure momentum of the trend.

Buy CFD Signal & exit signal

Aroon UP above 50 is a technical buy cfds trading signal

Aroon UP dipping below 50 is an exit signal if you had opened a buy cfds trade transaction.

Sell CFD Signal & exit signal

Aroon DOWN below 50 is a technical sell cfds trading signal.

Aroon DOWN rising above 50 is an exit signal if you had opened a sell cfds trade transaction.

Buy & Sell CFD Signals