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Creator: Tushar Chande
There are two lines in the Aroon Indicator. Aroon up and Aroon down.
The Aroon up line (bullish line) calculates the period since the new high was marked. The reading of the Aroon up line will be higher if a new high has been marked recently. If the new high was marked before a few sessions, the reading will be lower.
The Aroon down line (Bearish line) calculates the period since the new low was marked. The Aroon down line will be higher if the new low was made recently in the market.
If the Bullish Aroon line is above the bearish Aroon line, it shows that the trend is strong and the new highs are being made compared to lows in the current trend. It shows strong bullish momentum.
A bearish Aroon line above a bullish Aroon line indicates a strong and bearish trend.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.
This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.