Aroon Indicator Analysis and Aroon Gold Indicator Signals

Developed by Tushar Chande

This particular gold indicator assists in determining whether a specific financial or trading instrument is currently exhibiting a trend.

It's also used to indicate how strong the price trend is.

It helps spot new trends starting, like the break of dawn.

This gold indicator has 2 lines:

Aroon UP Indicator
Aroon DOWN Trading Indicator

Aroon UP Indicator

It's the percentage of time from the beginning of a period until the highest price that was reached during that trading timeframe.

If the price sets a new high, Aroon UP Indicator will be 100 - for every new high it will stay at 100. However, if the price moves & heads downward by a certain percent, then that percentage is subtracted from the 100 & Aroon UP Indicator begins to move down. This means that if Aroon UP Indicator stays at 100 then price is making new highs but when it starts to move down then price isn't making new highs.

Conversely, if the price establishes new troughs over a defined period, the Aroon UP Indicator will register at zero.

Aroon Gold Indicator - Aroon Indicator - Aroon Indicator MetaTrader 4

Calculation

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

Using ten price periods for the calculation:

Example 1: Peak Price Hit One Day Back

And if the highest price was reached yesterday, - one day prior

10 price times minus 1 day= 9

9/10 in % terms = 90

Aroon UP Trading Indicator will be at 90

Example 2: Highest price was 5 days ago

If the peak occurred 5 days ago then

10 price periods subtract 5 equals 5

5/10 in % = 50

Aroon UP Indicator will be at 50

Aroon DOWN Indicator

This calculation mirrors the Aroon UP Indicator methodology, but it utilizes the lowest point observed instead of the highest.

When a new historical low is registered, the Aroon DOWN Indicator registers at 100, conversely, upon establishing a new high, it moves toward zero.

Aroon Technical Gold Indicator - How Can I Place Trading Aroon Indicator on Chart?

Analysis & Generating Signals

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

Buy Gold Signal and exit signal

Aroon UP Indicator above 50 is a technical buy signal

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

Sell Gold Signal and exit signal

Aroon DOWN Indicator below 50 is a technical sell trade signal.

If the Aroon DOWN Indicator climbs above the 50 level, this serves as an exit signal for any previously initiated sell position.

Aroon Trading Technical Indicator - Aroon Indicator MetaTrader 4 - How Can You Interpret Aroon Indicator?

Buy and Sell Trading Signals

Explore More Instructional Material: