Aroon Oscillator on Gold

What it shows

A stepped line between -100 and +100 under the candles, with guides at 90, 0 and -90. Above zero, the window’s high is fresher than its low; out past ±90, one side has only just printed.

How Pravex works it out

1. Look at the last Length + 1 candles, which is 15 at the default.
2. Count how many candles ago the highest high printed, and how many ago the lowest low printed.
3. Up part = 100 × (Length − candles since the high) ÷ Length. The down part is the same with the low.
4. Aroon Oscillator = up part − down part, from -100 to +100.
5. Counting it through on an imaginary window: with Length 14, a high 3 candles ago gives an up part of 100 × 11 ÷ 14 = 78.6. A low 10 candles ago gives a down part of 100 × 4 ÷ 14 = 28.6. The oscillator is 50.

Settings

Setting	Default	What changing it does
Length	14	How many candles back the highest high and lowest low are searched. A shorter Length makes the line swing between the extremes. A longer one moves slowly and reaches them rarely.

How traders read it

The line is a measure of freshness. A reading above +90 says the high is very recent and the low is old, which is how a steady climb tends to look. A reading below -90 says the reverse.

Crossing zero is where the fresher extreme switches from the low to the high, or back. The ±90 guides catch the moments when one side has printed within the last candle or so.

Because it counts candles and not distance, a small new high by a fraction counts the same as a large one. Read it together with the price pane to see how big the move was.

When it misleads

The oscillator ignores how far price moved, only when. In a tight range a tiny new high flips the line to the top for a few candles with no real trend behind it. Once a high or low leaves the window, the line jumps, so a drop can appear with no new move. A slow, narrow stretch of gold candles can produce many small new highs and lows in a row.

Questions and answers

Why does the line jump when nothing new printed?

An old high or low has just dropped out of the 15-candle window. The next extreme in line is younger or older, so the count resets and the line steps.

Why are the guides at 90 and -90?

A reading past 90 at Length 14 needs the high to be at most a candle old and the low near the start of the window. The guides pick out those fresh one-sided moments.

Can the Aroon Oscillator stay at +100?

Yes, while each new candle keeps making the window’s high and the low stays at the far end. In a steady gold climb it can sit at or near +100 for several candles.

Aroon Oscillator vs Vortex Indicator?

The Aroon Oscillator counts how long ago the extremes printed. The Vortex Indicator compares the size of upward and downward movement against true range.

Related: Vortex Indicator, Trend Strength Index, Chande Momentum Oscillator, Aroon, every indicator.