| The Aroon Oscillator is used to identify the strength and direction of a trend. It was developed by Tushar Chande in 1995 and is based on the observation that prices tend to reach their highs and lows at different times during a trend. It is calculated by subtracting the Aroon Down indicator from the Aroon Up indicator, which are both derived from the highest and lowest prices observed over a certain period. The indicator oscillates between -100 and +100. It often identifies potential trend reversals and confirms existing trends. When the Aroon Oscillator crosses above or below the zero line, it can signal a likely change in trend. Traders may also look for divergences between the oscillator and the asset price as possible buy or sell signals. |
