Aroon Indicator

Parameters: period = 25 (10–100)

Overview

The Aroon indicator was developed by Tushar Chande in 1995. Named after the Sanskrit word meaning "Dawn's Early Light," it reflects its purpose of identifying the beginning of new trends. The indicator measures the time elapsed since the most recent 25-period high and low as a percentage, providing a unique time-based perspective on market momentum.

The Aroon consists of two lines that oscillate between 0 and 100: Aroon Up captures the time since a high, while Aroon Down measures the time since a low. This time-focused approach makes it particularly effective at identifying when trends are beginning or ending, setting it apart from traditional price-based indicators.

Interpretation & Trading Signals

Trend Strength Thresholds:

  • 70-100: Strong trend - values close to 100 indicate very strong trend
  • 0-30: Weak trend - values near zero indicate trend weakness
  • New Uptrend: Aroon Up persistently 70-100 while Aroon Down stays 0-30
  • New Downtrend: Aroon Down persistently 70-100 while Aroon Up stays 0-30

Crossover Signals:

  • Bullish Crossover: Aroon Up crosses above Aroon Down - shift to rising trend, buy opportunity
  • Bearish Crossover: Aroon Down surpasses Aroon Up - downward trend initiation, sell signal
  • Signal Timing: Crossovers often considered primary trend change signals
  • Late Signal Risk: May occur after substantial price move has already happened

Consolidation & Modern Usage (2025):

  • Both Below 50: Price consolidating, no strong directional movement
  • Lines Together at 50: Market lacking clear direction
  • 2025 Integration: Combine with SMA crossovers and Supertrend for confirmation
  • Multi-Timeframe: Confirm signals on higher and lower timeframes for reliability

Example Usage

Code examples will be available once the Rust implementation is complete.

Performance Analysis

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