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What is the Aroon indicator?
Formula: Aroon Up = ( ( 25 – Days since 25 – day high / 25 ) *100
Aroon down = ( ( 25 – Days since 25 – day low / 25 ) *100
Aroon Indicator is a trend indicator developed by Tushar Chande in 1995, This indicator helps to identify the upcoming trend and reversals. Some traders also use this indicator to find the best entry and exit points using the indicator’s lines.
This indicator consists of two lines Aroon up and Aroon down that fluctuate between 0 to 100. Aroon up is based on high price and Aroon down is based on low price. the calculation of two lines is based on the period of 25 days. and the moment these two lines intersect each other is the point we can find buy and sell signals.
Key Points
- Aroon Indicator is a trend indicator that is used to identify the trend changes and the strength of the same.
- This indicator is made from the composition of two moving average lines i.e. Up line and Down line.
- The moment the above two moving averages lines intersect each other it generates buy and sell signals.
- When the Aroon Up intersects above Aroon Down. It signals an upcoming bullish behaviour.
- Similarly, When the Aroon Down intersects above Aroon Up. It signals an upcoming bearish behaviour.
How to set up the Aroon indicator on Pocket Option
To set the indicator on Pocket Option. first of all, log in to your Pocket Option account. make sure to set your default chart to the candlestick.
Now, click on the indicator button and select Aroon Indicator from the list.
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How to trade with Aroon Indicator on Pocket Option
As, I said above the indicator is made from the composition of two lines Aroon up and Aroon down. The Aroon up denotes a bullish trend and is made of a blue line and Aroon down is made of a red line. when these two lines intersect each other it generates a buy and sell signal.
When the blue line intersects the red line from the bottom. and later the blue line stays above the red line is a signal of a bullish trend and here, we can place a buy trade.
Similarly, when the red line intersects the blue line from the top and the red line is below the blue line. it signals a bearish trend and here, we can place a sell trade.
So, this is the end of this article. I hope you have found this article helpful. the best you can do is try this trading indicator on Pocket Option demo account and once you are confident enough shift to the Pocket Option real account.
I wish you best of luck 🙂
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