The last ten articles have been entitled Analysis Toolbox and we discussed the various market cycles including trends and continuations. This next part of the The Trader’s Indicator Series focuses on the Indicator Toolbox, as we will discuss various indicators that are found on most trading platforms. We will discuss the indicator in the context of the chosen market, and if it resonates with you, please continue to do your own analysis with it. Trading successfully is all about feeling comfortable with a methodology and using that system repeatedly even when boredom sets in. I will be discussing indicators in alphabetical order that can be found on the MotiveWave platform, this wek its the turn 0f the Aroon Indicators. (for a free 2-week trial CLICK HERE)
The Aroon indicators account for the # of periods (e.g. daily, 4H, 1H, 1M) since price recorded an x-period high or low. The indicators include Aroon-Up and Aroon-Down. The standard setting is 25 periods which measures the number of periods since a 25-period high in the case of a 25-period Aroon-Up. A 25-period Aroon-Down measures the number of periods since a 25-period low. Since Aroon focuses on time relative to price, it differs from standard momentum oscillators, which look at price vis-à-vis time.
Aroon-Up = ((25 – Periods since 25-period High)/25) x 100
Aroon-Down = ((25 – Periods since 25-period Low)/25) x 100
USING THE TOOL
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