Aroon
Time since highest high and lowest low -- Aroon Up/Down crossovers and the Aroon Oscillator for trend timing.
What is Aroon?
Aroon measures how recently the price made its highest high and lowest low within a lookback window. The name comes from the Sanskrit word for "dawn's early light" -- it is designed to detect when a new trend is starting.
Aroon produces two lines (Aroon Up and Aroon Down), both ranging from 0 to 100. When Aroon Up is near 100, the highest high was very recent -- the uptrend is fresh. When Aroon Down is near 100, the lowest low was very recent -- the downtrend is fresh. When either line is near 0, that extreme happened long ago and the trend in that direction has gone stale.
How It's Calculated
In plain English: look back over the last N candles. Count how many candles ago the highest high occurred. If the highest high was on the most recent candle, Aroon Up is 100 (the high is as fresh as possible). If it was N candles ago, Aroon Up is 0 (the high is as stale as possible). The same logic applies to Aroon Down using the lowest low.
With a 14-period lookback, if the highest high was 3 candles ago: Aroon Up = ((14 - 3) / 14) * 100 = 78.6. The high is relatively recent, suggesting the uptrend is still active.
Reading Aroon
The Aroon Oscillator
The Aroon Oscillator combines Aroon Up and Down into a single line:
The oscillator ranges from -100 to +100. Positive values indicate bullish conditions (Aroon Up is higher than Aroon Down), negative values indicate bearish conditions. Zero-line crossovers serve as trend change signals.
The oscillator is available as a separate indicator in Simula (AROONOSC) and is useful when you want a simpler single-line view of the Aroon signal rather than tracking two separate lines.
Aroon vs ADX
Both measure trend characteristics, but differently:
ADX measures the strength of directional movement using smoothed averages of price changes. It is a momentum-based trend strength measure.
Aroon measures how recently new highs and lows occurred. It is a time-based trend identification tool. It does not care how large the price moves were -- only how recently the extremes occurred.
This means Aroon can detect trends that ADX misses (a slow, steady grind to new highs) and miss trends that ADX catches (a volatile market with strong directional movement but no new extremes within the lookback window).
Things to Watch Out For
Aroon values jump in discrete steps
Because Aroon counts whole candles since the last extreme, it changes in steps of (100 / period). With a 14-period lookback, each candle that passes without a new extreme drops the value by about 7.1 points. This creates a staircase pattern rather than a smooth curve. The Aroon Oscillator inherits this stepped behavior.
Sensitive to the lookback period
A short period (e.g., 7) makes Aroon very reactive -- the values swing between 0 and 100 rapidly. A long period (e.g., 50) makes it very slow -- values stay elevated for extended periods. The default of 14 balances responsiveness and stability, but the right choice depends on your trading timeframe.
A single extreme candle resets the count
If one candle sets a new highest high (even by a tiny amount), Aroon Up immediately jumps to 100. This can be triggered by a single outlier candle -- a news spike, for example -- even if the overall trend has not changed.
Where to Go Next
ADX -- a momentum-based alternative for measuring trend strength.
MACD -- trend direction and momentum from EMA relationships.
Trend Indicators Overview -- all 12 trend indicators available in Simula.
Trend Following -- strategies that use Aroon crossovers for trend entry and exit.