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AROON

Type: aroon • Category: indicators

Description​

Aroon indicator (aroondown, aroonup)

Parameters​

NameTypeDescriptionRequiredDefault
dataExpstringprices datano
highstringselect the column with highest pricesno
lowstringselect the column with lowest pricesno
timeperiodnumberNumber of periods to use for AROON calculationno14

Help​

AROON

Description​

The AROON indicator is a technical analysis tool used in financial markets to gauge the strength of a trend and predict potential reversals. It consists of two lines: Aroon Up and Aroon Down.

The AROON indicator is calculated using the following formula:

  • Aroon Up = ((Number of periods - Number of periods since highest high) / Number of periods) * 100
  • Aroon Down = ((Number of periods - Number of periods since lowest low) / Number of periods) * 100

What does this worker do?​

This worker calculates the AROON indicator for a given set of price data. It takes the following parameters:

  • dataExp: prices data
  • high: select the column with highest prices
  • low: select the column with lowest prices
  • timeperiod: Number of periods to use for AROON calculation

How to interpret the results​

The AROON indicator generates two lines: Aroon Up and Aroon Down. These lines oscillate between 0 and 100.

  • Aroon Up: measures the number of periods since the highest high. A high Aroon Up value (close to 100) indicates a strong uptrend, while a low value (close to 0) indicates a weak uptrend.
  • Aroon Down: measures the number of periods since the lowest low. A high Aroon Down value (close to 100) indicates a strong downtrend, while a low value (close to 0) indicates a weak downtrend.

When interpreting the results, consider the following:

  • Crossover: when Aroon Up crosses above Aroon Down, it may signal a potential uptrend. Conversely, when Aroon Down crosses above Aroon Up, it may signal a potential downtrend.
  • High values: when both Aroon Up and Aroon Down are above 70, it may indicate a strong trend.
  • Low values: when both Aroon Up and Aroon Down are below 30, it may indicate a weak trend or a sideways market.

How to use it​

For a visual representation of how to use the AROON indicator, refer to the following images:

Full AROON Indicator Usage Example​

Full AROON Indicator Usage Example

Short AROON Indicator Usage Example​

Short AROON Indicator Usage Example

Additional Knowledge​

The AROON indicator was developed by Tushar Chande in 1995. It is often used in combination with other technical analysis tools to confirm trading signals. The AROON indicator can be applied to various financial markets, including stocks, forex, and cryptocurrencies.

By using the AROON indicator, traders and investors can gain insights into market trends and make more informed decisions. However, as with any technical analysis tool, it should not be used in isolation and should be combined with fundamental analysis and risk management techniques.