Aroon
Aroon · module 10 of 33 · trend
How recently the highest high and lowest low of the lookback occurred.
- Aroon Up
- Aroon Down
- ▲/▼ where the rule triggers
Measures how recently the highest high or lowest low occurred. Up near 100 with Down low = fresh up-trend.
How to apply it
- 1. Add it. Start with 14 on 15m (Intraday).
- 2. Read the market first. Aroon Up near 100 with Aroon Down near 0 means fresh highs and no recent lows — an active uptrend.
- 3. Adjust for ranges. Both lines mid-range and crossing frequently indicates neither extreme is being refreshed.
- 4. Manage the trade. Place the stop at 1.5 × ATR and the target at 3.5 × ATR, and only act when the chart above shows the trigger.
How it is calculated
Aroon Up = 100 × (n − candles since n-high) ÷ n; Aroon Down likewise for the n-low.
Inputs
- · Period (14 or 25)
Reading it correctly
In a trend
Aroon Up near 100 with Aroon Down near 0 means fresh highs and no recent lows — an active uptrend.
In a range
Both lines mid-range and crossing frequently indicates neither extreme is being refreshed.
Settings by style
| Style | Suggested values |
|---|---|
| Intraday | 14 on 15m |
| Swing | 25 on 4h/1D |
These are conventional starting points, not optimised values. Test any change on your own pair and timeframe before relying on it.
Worked example
Period 25, last 25-candle high was 2 candles ago: Aroon Up = 100 × (25 − 2)/25 = 92. The 25-low was 19 candles ago: Aroon Down = 100 × (25 − 19)/25 = 24. Highs are fresh, lows are stale — consistent with an uptrend.
When it failed
On a 30-pip EUR/USD range, both Aroon lines swung between 20 and 80 and crossed eight times in a day. Each cross was a 'new trend' signal within the same range, because a marginal new high inside a range still resets Aroon Up to 100.
Limitations
- Uses only the timing of extremes, ignoring the size of moves.
- A one-pip new high resets the reading as strongly as a 100-pip breakout.
- Needs n candles of warm-up.
Works well alongside
- · ADX / DMI
- · ATR
- · Donchian Channels
Redundant with
- · ADX / DMI
- · Vortex Indicator
- · Donchian breakouts
Stacking these produces agreement by construction, which is not confirmation.
Practice exercise
On 4h EUR/USD, record every Aroon(25) cross and whether the new extreme exceeded the prior one by more than 0.5 ATR. Compare follow-through between the two groups.
Check your understanding
1. Aroon Up at 100 means:
- · Price is overbought
- ✓ The highest high of the lookback occurred on the current candle
- · Volume is peaking
- · ADX is above 25
Aroon Up reaches 100 when the lookback's high is the most recent candle.
2. Aroon ignores:
- · The timing of extremes
- ✓ The magnitude of the move that set the extreme
- · The lookback period
- · Closing prices entirely
Only recency counts, so a marginal new high scores the same as a decisive one.