TRADACITY

A separate indicator called the Aroon Oscillator can be constructed by subtracting Aroon (down) from Aroon (up). Since Aroon (up) and Aroon (down) oscillate between 0 and +100, the Aroon Oscillator oscillates between -100 and +100 with zero as the center crossover line. 

 

When Aroon (up) and Aroon (down) are moving lower in close proximity, it signals that a consolidation phase is under way and no strong trend is evident. When Aroon (up) dips below 50, it indicates that the current trend has lost its upward momentum. Similarly, when Aroon (down) dips below 50, the current downtrend has lost its momentum. A value above 70 indicates a strong trend in the same direction as the Aroon (up or down) is under way.

 

Usage:

It is used to determine whether the instrument is trending and how stable the trend is. It signals an upward trend is underway when it is above zero and a downward trend is underway when it falls below zero. The farther away the oscillator is from the zero line, the stronger the trend.