The Aroon is an indicator system which helps to define if the trading instrument is trending or not and if the trend is strong. Both, the Aroon Indicator and Oscillator were developed by Tushar Chande in 1995. "Aroon" is translated from Sanskrit as "Dawn's Early Light" and Chande named the indicator that to reflect the start of a new trend. The "Aroon up" and "Aroon down" lines form The Aroon indicator. The Aroon Oscillator is one line that is a distinction between "Aroon up" and "Aroon down." These three lines take the same parameter, the number of time periods, for the calculation. Both "Aroon up" and "Aroon down" fluctuate between 0 and +100, that's why the Aroon Oscillator can make up from -100 to +1 00, while with zero is used as the crossover line.
To calculate "Aroon up" for a certain period of time, define how much time (in percents) passed between the beginning of the time period and the point of the highest peak of that time period. For example, "Aroon up" will be 100 if the instrument is setting new highs for the time period. Furthermore, "Aroon up" will be zero when the instrument has moved lower every day during the time period.
To calculate "Aroon down" you should do the opposite action and to search new falls and not new peaks. Chande says that when "Aroon up" and "Aroon down" are moving lower in close proximity, it demonstrates an integration phase has started and strong trend is not obvious. If "Aroon up" falls under 50, it means that the ongoing trend has lost its upwards momentum. In the same way when "Aroon down" falls under 50, the ongoing downtrend has lost its momentum. Values higher than 70 show a strong trend in the same direction as the "Aroon up or down" is starting. Values less than 30 mean that a strong trend in the contrary direction is starting.