What it is
Tushar Chande introduced Aroon in 1995; the name means 'dawn's early light' in Sanskrit. Rather than measuring how far price has moved, it measures time: how many candles since the last new high and the last new low. Fresh highs mean an uptrend is alive; old highs mean it is ageing.
This makes it good at telling trends from ranges. In a range both lines drift down together because no new extremes are being made.
How it is calculated
1. Look back over the last 25 candles (plus the current one). 2. Count the candles since the highest high. Aroon Up = 100 x (25 minus that count) / 25. 3. Count the candles since the lowest low. Aroon Down = 100 x (25 minus that count) / 25. 4. A new high on the current candle makes Aroon Up 100; a high 25 candles ago makes it 0.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Length | 25 | 2 to 200 | How many candles to look back for the highest high and lowest low. Shorter catches new trends sooner but whipsaws more. |
How to read it
How to trade it
- 1
On a 1 hour US30 chart, wait for Aroon Up to cross above Aroon Down.
- 2
Require Aroon Up to reach 70 or more, showing new highs are actually being made.
- 3
Enter on the next pullback, or on a close above the candle that pushed Aroon Up to 100.
- 4
Stop below the most recent swing low, for example 80 to 120 points on 1 hour US30.
- 5
Exit when Aroon Up falls below 50 or Aroon Down crosses above it, or at 2 times the stop.
The uptrend idea is wrong if Aroon Down crosses back above Aroon Up, or if price closes below the swing low that started the move.
WickSpeak draws Aroon Up and Aroon Down in their own pane and writes a plain-English reading on the live candle: what they measure, whether the market is trending or ranging right now, how to trade it and what would prove it wrong. In Playbook, a condition can check when Aroon Up crosses above or below Aroon Down, or Aroon Up sits above or below Aroon Down.
Best markets and timeframes
Works on any market. On gold and indices, 1 hour and 4 hour charts give the clearest trend reads. On short charts the lines flip often during the quiet Asian session.
Common mistakes
- Trading every crossover, including those where neither line reaches 70.
- Forgetting it measures time, not distance. A new high by 1 point still scores 100.
- Using it alone in a range, where both lines drift and cross repeatedly.
Works well with
Questions traders ask
What is the best setting for Aroon?
The standard setting is 25 periods. Some intraday traders use 14 for faster signals. Longer settings give fewer, more reliable trend reads.
What does Aroon Up at 100 mean?
It means the current candle made the highest high of the look-back window. It shows a fresh high, not the size of the move.
How do you trade the Aroon crossover?
Buy when Aroon Up crosses above Aroon Down and reaches 70, with a stop below the last swing low. Sell when the opposite happens. Crosses where both lines stay low are weak.
What is the difference between Aroon and ADX?
Both show trend strength. ADX measures how far price is moving in one direction, while Aroon measures how recently new highs or lows were made. Aroon often reacts sooner to a fresh breakout.