Aroon Indicator is a technical analysis tool used to identify upcoming trends and analyse the change in the price of an asset. In this article, I will cover everything about the Aroon Indicator and how you can use this indicator to find an upcoming trends and reversals.
Key Points
- Aroon indicator is a trend indicator that helps traders to analyse the price movement of an asset plus identify upcoming trends and reversals.
- The indicator was developed by Tushar Chande in 1995 the indicator is designed to identify the trends and measure the strength of the trend.
- This indicator is composed of two lines name Aroon up and Aroon down both ranging from 0 to 100.
- Aroon up line measures the number of periods since the highest high while the Aroon down line measures the number of periods since the lowest low.
- When the two lines intersect each other it generates buy and sell signals and traders can use this opportunity to decide about the potential trends and reversals.
How to set Aroon indicator on Pocket Option
Pocket Option offers numerous high-quality trading tools one of them is Aroon indicator. This indicator is a free-to-use financial instrument which means that you can even use this indicator on the Pocket Option demo account.
First of all login to your Pocket Option demo account or real account. In case, you don’t have one click here.
Once you have logged in click on the indicator button at the top of the page and search for the for the Aroon indicator in the list.
Next, make necessary amendments based on your trading nature if you love to take quick trades you should reduce the indicator period to at least 10 and if you love to take long-period trades increase the indicator period 30.
How to use the Aroon indicator on Pocket Option?
You can use the Aroon indicator in multiple ways however, the most popular ones are
Solo Aroon Indicator: You can use a Solo Aroon indicator on the Pocket option trading chart. As I said above, when the Aroon Up and Aroon Down line intersect each other it generates buy and sell signals. When the Aroon up line intersects above the Aroon down line it signals a strong bullish trend and vice versa when the Aroon up line intersects below the Aroon down line it signals a strong bearish trend.
Combine with other trend indicators: Aroon indicator is a good indicator and can be used solely on the trading chart however, if you want better results with this indicator you should try the combination of the Aroon indicator with other trend indicators like moving averages.
When the Aroon indicator signals a bullish trend plus the price intersects above the moving average line it signals a strong bullish trend and you can place a buy trade here similarly when the Aroon indicator signals a bearish trend plus the price intersects below the moving average line its signals a strong bearish trend and you can place a sell trade here.