What Is the Aroon Indicator?
Aroon plots two lines measuring how many bars have passed since the highest high and the lowest low of the lookback period, expressed as a percentage. A reading of 100 means the extreme happened on the current bar; 0 means it happened at the far end of the window.
Tushar Chande’s indicator asks a question nothing else here asks: not how far price moved, but how long ago it last did something notable.
How it works
Two lines, both counting bars:
Aroon Up = 100 × (length − bars since the highest high) / length
Aroon Down = 100 × (length − bars since the lowest low) / length
Notice what is absent: price. How high the high was does not appear anywhere. The only input is when it happened.
What 100 means
Aroon Up at 100 means the highest bar of the window is the current bar. A new 25-bar high, today.
It read 100 on 5 bars across this chart, each one a fresh high, and it decays one step per bar afterwards until either a new high arrives or the old one falls out of the window.
Aroon Down at 100 is the mirror — a new 25-bar low today.
Both low at once means neither extreme is recent, which is a genuine and unusual output: the market has been inside its own range for a while.
The reading
Aroon Up above Aroon Down means new highs are more recent than new lows. That is a trend, defined by timing rather than by distance.
Two crossings across 64 bars here — far fewer than the 10 the ADX page’s +DI and −DI managed on a similar chart, because the 25-bar lookback makes it slow to change its mind.
The two indicators answer different questions and it is worth keeping them apart. average directional index (ADX) asks how strong the move is. Aroon asks how fresh it is. A market can be making steady new highs on tiny increments — fresh but weak — and the two lines will disagree.
Its blind spot
This is the structural weakness and it follows straight from the formula.
Two bars on this chart both scored 100. One was 1.12 higher than the other. To Aroon they are the same event: a new 25-bar high, today.
So a trend inching to marginal new highs and one making violent new highs read identically. Every other indicator here would separate them, because every other indicator has price in it.
The fix is not a setting. It is to read the chart alongside the panel, or to pair it with something that measures distance — average true range (ATR) for size, or ADX for strength.
The settings
One number: the lookback, 25 by default.
The lookback is the whole scale of the indicator. At 25 a reading of 0 means “no new high for 25 bars”; at 14 the same reading means something much less severe, and the line reaches its extremes far more often.
So changing the length does not tune sensitivity, it changes the question. That is a slightly different situation from most settings sections here, where the parameter mostly adjusts how often something fires.
The Aroon Oscillator
A one-line version exists and it is worth knowing which one your platform gave you.
Aroon Oscillator = Aroon Up − Aroon Down, on a scale from +100 to −100. Above zero means new highs are more recent than new lows; below zero, the reverse.
It is easier to read and it discards something. The two-line version can show both lines low at once — the genuinely useful “neither extreme is recent” state. Subtract them and that becomes zero, which is the same reading you get when both are at 100 and the market is violently making new highs and new lows in turn.
Two very different markets, one number. So the oscillator is a convenience with a real cost, and if you only have the single line you have lost the one output that distinguishes this indicator from the others on this site.
A worked example
Use it as a filter, not a signal. Both lines low means the market has been range-bound and the trend tools should go away — the same job the ADX page describes, answered by a different measurement.
Aroon Up at or near 100 means the trend is fresh. That is worth knowing before you take a pullback entry, because a trend that last made a new high twenty bars ago is a different proposition.
Then get the levels and the invalidation from price, since the panel has no prices in it at all.
The original data
Across our study of 24,971 trading videos, 61 cover Aroon. The median one gets 4,709 views, 92% never pass 50,000, and the median length is 8.0 minutes.
That 92% puts it among the most saturated topics measured here, alongside Hull moving averages — a small field with almost no reach.
The corpus carries description text for 60 of those 61 — effectively the whole field — and across those 60, two mention invalidation, failure, or what a bad read looks like.
When it fails
Sideways, both lines thrash
In a trading range each push at either edge sets a fresh extreme, so whichever line just spiked jumps to 100 and the crossings come from noise.
The tool is at its best saying “neither extreme is recent”, and a range keeps refreshing both.
A single spike dominates the window
One outlier bar sets the high for the whole lookback. Aroon Up then decays for 25 bars from an event that may have been a data error or a one-off, and nothing in the indicator discounts it.
Size is invisible
Covered above and it is the one that matters. 1.12 of difference, scored identically.
You read the freshness after the trend ended
Every trend’s final new high scores 100, exactly like every new high before it. Freshness at the moment it happens cannot distinguish the start of a run from the end of one.
Related
ADX is the other trend filter here, measuring strength where this measures recency.
Market structure is the same question read from price, with the size information Aroon discards.
And Donchian Channels draws the same extremes as lines rather than counting how old they are.
This one took me a while to see the point of, and the point is that it answers a question I was asking badly. I would look at a chart and think the trend feels stale, which is a feeling. Aroon turns that into a number - how long since this thing last made a new high - and a number is something I can be consistent about. What it cannot tell me is whether that high mattered, and I have to get that from the chart.
— Michael Whitman, from this video
This page is educational, not financial advice. Test every idea on your own charts before risking money.