Aroon Class

Defines a range of Aroon indicators which were originally developed by Tushar Chande in order to establish whether a price is trending or within a trading range.

For a list of all members of this type, see Aroon Members.

System.Object
   Aroon

Remarks

The Aroon indicator is made up of the Aroon Down indicator and the Aroon Up indicator and together are said to form the Aroon indicator. We also provide the Aroon Oscillator within this component.

The determination of whether a market is trending and within a trading range is a key difficulty is the development of trading systems. The Aroon indicator has been developed in order to indicate when a trending approach such as moving averages or the trading range approach such as the application of oscillators in more appropriate.

Interpretation

Interpretation of the Aroon indicator depends on identifying one of the following three scenarios:

• Extended Up or Down - When the Aroon up indicator hits 100, (i.e. a high in the past period) then it could indicate the start of a up trend. If the value of the Aroon Up indicator stays in the range 70-100, and the Aroon Down indicator within the range 0-30, then it indicates that a market up trend is taking place. Conversely, when the Aroon Down indicator hits 100, (i.e. a low in the past period) then it could indicate the start of a down trend. If the value of the Aroon Up indicator stays in the range 70-100, and the Aroon Up indicator within the range 0-30, then it indicates that a market down trend is taking place.
• Parallel Movement - If the Aroon Up and Aroon Down are moving parallel to one another and/or lie within the range 30-70 then consolidation of the asset is indicated.
• Crossover of Indicators - The Aroon Up indicator cross from below to above the Aroon Down indicator then a bullish signal is indicated, conversely if the Aroon Down indicator cross from below to above the Aroon Up indicator then a bearish signal is indicated.

For more information on the Aroon indicator see the article written by Tushar Chande in the September 1995 issue of Technical Analysis of Stocks and Commodities.

One Period and Multi Period Versions

For many of the indicators we provide essentially two versions of the same method. The first version evaluates the indicator over the entire period given and the second version evaluates the indicator over all the sub-periods of a given length. Moreover, the version which evaluates over all sub-periods of a given length will return the results as an array where the 1st term of the array will be the value associated with the most resent sub-period, and the previous element corresponding to the previous sub-period and so on.

The naming of these two versions will follow the convention that if the indicator which evaluates over the entire period and returns a single element is named ABCIndicator, then the corresponding indicator over all sub-periods (of a given length) which returns an array will be denoted by ABCIndicatorOverPeriod.

For example, if our source data has N elements then the two versions of a given indicator, where the number of periods used within the sub-periods is n would correspond to:

1. ABCIndicator - Evaluation of the indicator over the whole period of length N.
2. ABCIndicatorOverPeriod - Will return an array where the first term is the value of the indicator ABCIndicator on the most recent n periods, and the next term is the value of the indicator ABCIndicator on the previous n+1 periods minus the most recent period and so on. That is, for each iterative evaluation 'the window of evaluation' is shifted one place back.

Requirements

Namespace: WebCab.COM.Finance.Trading.Indicators

Assembly: WebCab.COM.TA (in WebCab.COM.TA.dll)

See Also

Aroon Members | WebCab.COM.Finance.Trading.Indicators Namespace

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