Aroon indicator is a young one, developed by Tushar Chande in 1995. Aroon was created to measure strength of a trend and potentials for its continuation as well as the quality and type of the trend: up-trend, down-trend or sideways moving market. The Aroon indicator forex signal 30 indicators ranges from 0 to 100. There are 4 important levels to monitor when trading with Aroon indicator: 0, 30, 70 and 100.
The default time period for Aroon indicator is 25, on some panels – 14. But, it can be changed to, for example, 10-periods for shorter term trades or to 50-periods for longer ones. How to trade using Aroon indicator? As market changes, traders adjust their trading approaches and methods from trend following to tools used during market consolidations. Aroon indicator helps traders to determine when to use a trend following indicators and tools and where to switch to oscillator like tools that work best in consolidating markets.
One of the major problems of the aroon indicators is the arbitrary time period. If you vary the period, from say 25 to 15 days, you get a second diagram that appears to be, essentially, offset from the first, therefore giving completely different signals! There is no “holy grail” when it comes to indicators. The best thing is to use multiple indicators for confirmation. It is also important to understand the formula used to calculate each indicator, to avoid using linear variations of the same algorithm which, of course, would yield the same result instead of valid confirmation.
4 file for this indicator for download? The problem is that you should know how to use, i mean how you read the indicator you are using. I have a set up of twelve indicators. I use all at the same time one by one.