Aroon Oscillator

The Aroon Oscillator is a trend-following indicator based on the Aroon Indicator that measures the strength of the current trend and probability of continuation. Aroon Up and Down lines measure the number of periods since the last 25-period high and low.

The Aroon Oscillator crosses above the zero line when Aroon Up moves above Aroon Down. The Oscillator drops below the zero line when Aroon Down moves below Aroon Up. The Aroon Oscillator’s presence above zero indicates an uptrend, while its presence below zero indicates a downtrend.

Traders watch for zero-line crossovers to signal potential trend changes. They also watch for big moves — above +50 or below -50 — to signal strong price moves. The oscillator moves between -100 and 100. A high oscillator value is an indication of an uptrend; a low oscillator value is an indication of a downtrend.

Calculation

Aroon Oscillator = Aroon Up − Aroon Down

Where:

X = number of periods (typically 25 periods are used)

Aroon Up = ((X − periods since X period high) / 25) × 100

Aroon Down = ((X − periods since X period low) / 25) × 100

To calculate the Aroon Oscillator, first calculate Aroon Up. Subtract this from the number of periods, then divide the result by the number of periods. Multiply by 100.

Calculate Aroon Down, subtract this from the number of periods, then divide the result by the number of periods. Multiply by 100.

Subtract Aroon Down from Aroon Up to get the Aroon Oscillator value.

The calculation is then applied to each new period in the same manner.