## What is the Aroon Oscillator?

The Aroon Oscillator is a trend-following indicator that uses aspects of the Aroon Indicator (Aroon Up and Aroon Down) to gauge the strength of a current trend and the likelihood that it will continue. Readings above zero indicate that an uptrend is present, while readings below zero indicate that a downtrend is present. Traders watch for zero line crossovers to signal potential trend changes. They also watch for big moves, above 50 or below -50 to signal strong price moves.

## The Formula for the Aroon Oscillator:

Aroon Oscillator=Aroon Up−Aroon Down

Aroon Up=100∗(25−Periods Since 25-Period High)​/25

Aroon Down=100*(25−Periods Since 25-Period Low)​​/25

The Aroon Oscillator is a single line that is defined as the difference between Aroon(up) and Aroon(down).

All three take a single parameter which is the number of time periods to use in the calculation.

Since Aroon(up) and Aroon(down) both oscillate between 0 and +100, the Aroon Oscillator ranges from -100 to +100 with zero serving as the crossover line.

Aroon(up) for a given time period is calculated by determining how much time (on a percentage basis) elapsed between the start of the time period and the point at which the highest closing price during that time period occurred.

When the price is setting new highs for the time period, Aroon(up) will be 100.

If the price has moved lower every day during the time period, Aroon(up) will be zero.

Aroon(down) is calculated in just the opposite manner, looking for new lows instead of new highs.

When Aroon(up) and Aroon(down) are moving lower in close proximity, it signals a consolidation phase is underway and no strong trend is evident.
When Aroon(up) dips below 50, it indicates that the current trend has lost its upward momentum.
When Aroon(down) dips below 50, the current downtrend has lost its momentum.
Values above 70 indicate a strong trend in the same direction as the Aroon (up or down) is underway.
Values below 30 indicate that a strong trend in the opposite direction is underway.