Aroon Up/Down

The Aroon indicator was developed by Tushar Chande. Aroon is Sanskrit word meaning "dawn's early light" or the change from night to day. The Aroon indicator allows you to anticipate changes in security prices from trending to trading range. The indicator uses two lines: Aroon Up and Aroon Down. Aroon Down is a measure of how close the current bar is to the most recent lowest Low bar found in the last N bars. Aroon Up is a measure of how close the current bar is to the most recent highest High bar found in the last N bars. Additionally Aroon oscillator can be defined as the difference between the Aroon Up and Aroon Down indicators.

Aroon indicator ranges from 0 to 100 and it is drawn with additional 30/70 levels. The default period is 14 days. The indicator works as follows: if a security makes a new 14-day high, the Aroon Up = 100; when the security makes a new 14-day low, the Aroon Down = 100; when there was no new high in 14 days, the Aroon Up = 0; and consequently when there was no new low for 14 days, the Aroon Down = 0.

Aroon indicator is an another way (in addition to the ADX indicator) of detemining if market is trending or not.