Investor Education Momentum Indicators Aroon

Financial Indicator

Equity momentum-indicators tool provides you with the Momentum Indicators execution environment for running Aroon indicator against Equity. Momentum indicators of Equity are pattern recognition functions that provide distinct formation on Equity potential trading signals or future price movement. Analysts can use these trading signals to identify current and future trends and trend reversals to provide buy and sell recommendations. Please specify Time Period to run this model.

The Aroon Indicator was developed by Tushar S. Chande to indicate when a new trend is dawning. The indicator consists of two lines that measure how long it has been since the highest high/lowest low has occurred within an (N) period range. When Investor Education Aroon Up is staying between 70 and 100 then it indicates an upward trend. When the Aroon Down is staying between 70 and 100 then it indicates an downward trend. A strong upward trend is indicated when the Aroon Up is above 70 while the Aroon Down is below 30. When Investor Education Aroon Down crosses above the Aroon Up, it indicates a weakening of the upward trend (and vice versa).. View also all equity analysis

Aroon In A Nutshell

Spotting reversals and potential shifts in the market is the goal of every trader and investor. If there way a tool that did so we would all be rich. Instead, you should be looking at Aroon as a way to alert you to a potential shift in the market, and from there you complete research and formulate your own opinion.

There are many different trend and momentum tools out there, and it only expands as people learn how to build unique indicators. Aroon has been around for quite some time now and is used in helping to determine the trend of the market. This particular indicator will utilize two lines and ranges from 0 to 100.

Closer Look at Aroon

Learning how to use and implement this indicator with your current strategy is the most important. First, you will note there are two lines on the indicator, one typically green and one typically red. When the red one is near 100 and the green one is near 0, that means the market may be shifting to a negative or bearish trend. Reversing the information works the same for a potential shift to a bear market. When the lines cross in the middle, that is your queue to be on the lookout for the potential setup of a market shift.  

Some ways to use this could be with standard deviation or Bollinger Bands, allowing you to note where the market may or may not want to go. These types of indicators tend to work better on longer time frames, but you can edit the inputs and it may adjust well for quick trading intraday. One other way to use Aroon on your charts is if the market seems to be consolidating, you will note that both lines are below the 50 level mark. Again, these are not concrete indicators, but rather a time for you to look and evaluate a chart or current positions you may have in the market.

Additional Technical Research

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