Aroon Oil Indicator Technical Analysis & Aroon Oil Technical Indicator Signals

Developed by Tushar Chande

This oil indicator is used to determine if a trading instrument is trending or not.

It is also used to indicate how strong the oil trend is.

It is also used to spot the starting of a market trend, the name its name which means morning or dawn.

This oil indicator has two lines:

• Aroon UP
• Aroon DOWN

Aroon UP

Percentage of time between the start of a time period and the highest point that crude oil price has reached during that period.

If crude trading price sets a new high, Aroon UP will be 100 - for each new high it will stay at 100. However, if crude trading price moves down by a certain percentage, then that percentage is subtracted from the 100 and Aroon UP starts to move down. This means that if Aroon UP stays at 100 then crude trading price is making new highs but when it starts to move down then crude oil price is not making new highs.

If however crude trading price is making new lows for a particular crude trading price period then Aroon UP will be at zero

Calculation

Aroon UP is a percentage of time between crude trading price period & highest point.

If you use 10 crude oil price periods for calculation:

Example 1: Highest crude oil price was 1 day ago

Then if the highest point was yesterday, i.e. 1 day before then

10 crude trading price periods minus 1 day= 9

9/10 in percent terms = 90

Aroon UP will be at 90

Example 2: Highest crude trading price was 5 days ago

If the highest point was 5 days ago then

10 crude oil price periods minus 5 = 5

5/10 in percent = 50

Aroon UP will be at 50

Aroon DOWN

This is calculated the same as Aroon UP but this time using lowest point instead of highest point.

When a new low is set Aroon DOWN is at 100 & when a new high is set it will move to zero.

Crude Oil Technical Analysis & How to Generate Crude Trading Signals

This oil indicator uses the 50% level to measure momentum of the trend.

Buy Oil Trading Signal and exit signal

Aroon UP above 50 is a technical buy crude oil trade signal

Aroon UP dipping below 50 is an exit signal if you had opened a buy crude oil trade.

Sell Oil Trading Signal and exit signal

Aroon DOWN below 50 is a technical sell oil signal.

Aroon DOWN rising above 50 is an exit signal if you had opened a sell crude oil trade.

Buy & Sell Trading Signals