Blockchain and Cryptocurrency Advanced - The Aroon Oscillator and How It Works

The Aroon indicator is not to be confused with the Aroon oscillator as they work differently. The Aroon oscillator is also a technical analysis tool that basically measures the strength of a trend and is determined by doing a subtraction of the Aroon Down from the Aroon Up or simply put, the difference between the Aroon up and Aroon down. Like the Aroon indicator, Tushar Chande was also the developer of the Aroon Oscillator in 1995. The whole idea of the Aroon is to help traders and technical analysts determine whether the price of an asset is trending in the market and if the price is trending, what the strength of the trend is.

Unlike the Aroon indicator that has two lines the Aroon up and the Aroon down that moves between 0 and 100, the Aroon oscillator line oscillates between -100 and +100 with 0 as the center value and also serves as the crossover point. If the price is moving in an uptrend, the Aroon oscillator line moves towards its upper limit and if the price is moving in a downtrend, the Aroon oscillator line moves towards its lower limit. When the Aroon oscillator line moves above 0, it is an indication of a possible incoming upward trend. When the Aroon oscillator line moves below 0, it is an indication of a possible incoming downward trend. The strength of the trend is determined how close the Aroon oscillator value is to either extreme.

_{Aroon Oscillator on the AAVE/USDT Chart}

Considering an Aroon Indicator with a single oscillating line, what does the measurement of the trend at +50 and -50 signify?

The Aroon indicator with a single oscillating line is basically a type of Aroon indicator that combines the Aroon up and Aroon down into a single oscillating line. The Aroon indicator with a single oscillating line has a single line that moves between the values of -100 and +100. In the Aroon indicator with a single line, when the oscillating line has a value of 0 which is the center line, it can be an indication that there is no trend present or the ranging market is present or the consolidation in the market.

When the oscillating line moves above the value of +50, it can be an indication of a bullish trend. When the oscillating line moves below the value of -50, it can be an indication of a bearish trend. The Aroon indicator with a single oscillating line provides valuable trading signals. When the Aroon indicator oscillating line moves above the value of +50 or higher and closer to the +100, it is an indication of a strong upward trend. When the oscillating line moves below the value of -50 and closer to the -100, it is an indication of a strong downward trend.