Aroon trend
TrendBeginner
Aroon, from Tushar Chande, measures how recently price made a high versus a low. It answers a timing question, not a distance question: did the extreme happen on this bar, or many bars ago? A strong uptrend keeps Aroon Up near 100 and Aroon Down near 0.
Not investment advice. Nothing here is a recommendation to buy or sell anything. Backtests and historical studies are not guarantees, and a rule that worked in one sample can fail in the next. Trading can lose money. Links are for education, not endorsements. Do your own research.
- Rules
- The usual lookback is 25 periods. Aroon Up is 100 times the bars since the highest high, scaled by the lookback. A long bias is Aroon Up above 70 and above Aroon Down. Exit when Aroon Down crosses above Aroon Up, or when both lines fall toward the middle and neither extreme is fresh. The oscillator form is simply Up minus Down.
- Where AI fits
- AI can scan a universe for markets whose Aroon lines have just separated, then hand those names to a human or to a second rule for the actual order. It should not treat every reading above 70 as an entry. A model is more useful ranking how cleanly the two lines have separated across symbols than predicting the next return.
- Markets
- Stocks, ETFs, and futures with a regular session.
- Timeframes
- Daily is the usual setting. Intraday only if the lookback is tied to that session length.
- Risks
- A fresh high in a choppy tape still prints Aroon Up at 100. The indicator ignores how large the high was, so a one-tick extreme looks like a breakout. Shortening the lookback makes it a noise detector.