The Aroon indicator is used to identify trend changes in the price of an asset, as well as the strength of that trend. The indicator measures the time between highs and the time between lows over a time period of your selection. The idea is that strong uptrends will regularly see new highs, and strong downtrends will regularly see new lows. The indicator signals when this is happening. You can adjust the time frame between the new highs or new lows in the setting/input panel.

New historical highs are often a very strong indications of strong momentum in an equity. Because a large number of individual are looking for this as an indication of a good entry point, it often become a spring board for a new trend.

Aroon is also an excellent tool to screen stocks with to look for the emergence of a new trends.

The Aroon indicator was orginally developed by Tushar Chande.

THE SWING•GENIE AROON INDICATOR

AROON LEVEL INDICATIONS

The SWING•GENIE AROON indicator was developed to provide strong color bands at each of the levels that are indicated a key levels by the developers of the indicator. It also allows you to see at a glance if the trend is up or down by just looking at the color of line on top. Green and the trend is up, red and the trend is down.

KEY TAKEAWAYS:

The Arron indicator is composed of two lines. An Up line which measures the number of periods since a High, and a Down line which measures the number of periods since a Low.

Crossovers of the two lines (AROON UP and AROON DOWN) can signal trend reversals.

NEW UP TREND DEVELOPING

• Surge to 100 by Aroon Up and decreasing value in Aroon Down.

NEW DOWN TREND DEVELOPING

• Surge to 100 by Aroon Down and decreasing value in Aroon Up.

STRONG TREND DEVELOPING, STRENGTHNING OR CONTINUNING

• Aroon Up above 70 indicates a strong up-trend.

• When the Aroon Up is above the Aroon Down, it indicates bullish price behavior.

• Aroon Down above 70 indicates a strond down-trend

• When the Aroon Down is above the Aroon Up, it signals bearish price behavior.

STRONG TREND WEAKNING

• Aroon Up below 50 warns that the up-trend is weakening.

• Aroon Down below 50 signals that the down-trend is weakening.

CONSOLIDATION

• The two moving down in close proximity indicates consolidation, with no clear trend.

If the Aroon Up line goes to the top of the range there is a strong possibility of an up trend beginning. If the Up line stays between the 100 and the 70 values then an up trend is in motion. The closer it remains to the top, the stronger the trend. If the Up line moves down breaks through the 50% line, then the trend is weakening. If it reaches the bottom of the range, then the up trend is usually over and a downtrend may have started. In summary, a strong trend is likely happening if the Up line goes to the top and stays there. A failing trend is likely if the Up line pulls back to the 50% threshold, and a possible reversal to a down trend if it falls below the 30% threshold. Reverse logic is true for a down trend using the Aroon Down line.

SYSTEM Integration of the AROON Indicator

The nature of the individual SWING•GENIE indicators provides you with both an advanced and progressive warning of trading opportunities and exit warnings. In the examples shown above the first cronological signal generated is by the GENIE CYCLES indicator (A). If you where not already in this trade the second signal indicating you should enter was AROON (E). AROON and shows the cross of the up line over the down line generatting new up trend indication. The next signal was generated by the Momemtum Trend indicator (F). MOTREND indicating that the short term Hurst cycle is bouncing against the upper range of the long term Hurst Cycle. You want to remain in this trade as long as that condition continues to exist. As you can see the GENIE CYCLES indicator whent through a reversal in the middle of the the up-trend green band produced by the MOTREND indicator. This is important because the MOTREND indicator would have keept you in this trade through this short term reversal and and subsuquent reverson to mean.

https://www.ensignsupport.org/bb/pdfs/Studies-AroonIndicator.pdf

https://www.fidelity.com/learning-center/trading-investing/technical-analysis/technical-indicator-guide/aroon-indicator

Finding The Trend With Aroon: https://www.investopedia.com/articles/trading/06/aroon.asp

• X-Pattern: https://www.stockgumshoe.com/reviews/high-velocity-profits/will-keith-fitz-geralds-x-pattern-drive-this-stock-up/

Several paid news letters hype that their magical “X” marks the spot as so miraculous that you should be paying to obtain their advice on when this profitable signal appears. They are just selling you the Aroon indicator when it signals a new high, repackaged with a little hocus-pocus marketing. You can read about one such paid campaign here.

• The Time Price Oscillator by Tushar S. Chande: Stocks & Commodities V13 (369-374)

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•3• AROON TREND DETECTION