| The Aroon indicator is a technical analysis tool used to measure the strength of a trend and identify potential trend changes in a financial asset. Developed by Tushar Chande in 1995, the Aroon indicator is designed to show whether a security is trending and to indicate the beginning and end of a trend. The Aroon indicator consists of two lines: the Aroon Up line and the Aroon Down line. The Aroon Up line measures the number of periods since the highest price within a given period, while the Aroon Down line measures the number of periods since the lowest price within the same period. The values of these lines range from 0 to 100. When the Aroon Up line is above the Aroon Down line, it indicates that the asset is in an uptrend, and vice versa. The distance between the two lines indicates the trend's strength, with a larger gap showing a stronger trend. The Aroon indicator can also be used to identify potential trend reversals when the two lines cross over. |
