Detrended Price Oscillator (DPO) - Indicator Formula

Aroon is an indicator system developed by Tushar Chande in 1995. The indicators help traders determine whether or not a stock is trending and the strength of that given trend. The Aroon indicator measures the time between highs and lows over a period of time.

The name "Aroon" comes from an ancient Indian language which means "Dawn's Early Light", and was chosen because the indicators are supposed to indicate the start of new trends.

There are two main Aroon indicators: Aroon-up and Aroon-down.

Aroon-up measures the strength of an uptrend. When the Aroon up is above the Aroon down it is viewed as bullish. The indicator usually uses 25 periods of data. It is calculated as follows:

Aroon-Up = (( 25 - Days Since 25-day High ) / 25) * 100

Aroon-down measures the strength of a downtrend. When the Aroon down is above the Aroon up it is viewed as bearish. The indicator usually uses 25 periods of data. It is calculated as follows:

Aroon-Up =

( 25 - Days Since 25-day Low )

* 100

25

Related Articles