Aroon Indicator on a Live Gold Chart

What it shows

Aroon Up (highs) and Aroon Down (lows) share a 0 to 100 pane. When one is near 100 and the other low, price has recently pushed hard one way.

How Pravex works it out

1. Look at the last Length + 1 candles, which is 15 with the default. Find the candle with the highest high. If two candles tie, the newest one counts.
2. Count how many candles ago it was. Aroon Up = 100 × (Length − candles ago) ÷ Length. A high on the current candle reads 100; a high on the oldest candle of the window reads 0.
3. Do the same with the lowest low for Aroon Down, again taking the newest candle on a tie.
4. The lines need Length + 1 candles of history before they start.

Settings

Setting	Default	What changing it does
Length	14	How far back the search for the highest high and lowest low reaches. A shorter length makes both lines swing between 0 and 100 quickly; a longer one changes them slowly.

How traders read it

Aroon Up above Aroon Down says the latest extreme in the window was a high; the reverse says it was a low. The wider the gap, the more one-sided the window has been.

Both lines at 100 cannot happen together on the same candle except by a candle that sets the window’s high and low at once. More often you see one at 100 while the other drifts down, and a crossover when the two swap places.

Both lines low and close together say that neither a fresh high nor a fresh low has appeared for a while, which is what a sideways stretch looks like.

When it misleads

Aroon only counts time since an extreme and ignores how big the move was. A tiny new high by one cent resets Aroon Up to 100 just as a large breakout does. Because it works in whole steps of candles, with a length of 14 each line jumps by about 7 points per candle. On gold the candle count skips the weekend, since no candles form then.

Questions and answers

When does Aroon Up hit 100?

The highest high of the last 15 candles (14 plus the current one) is the current candle. It means price has just made a new high for that window.

What happens when two candles have the same high?

The newest one counts as the highest, so the line reads as if the high happened more recently. The same rule applies to equal lows.

Why does Aroon look at 15 candles when the length is 14?

The window is Length + 1 candles, so a high that happened exactly 14 candles ago is still inside it and reads 0, while a high on the current candle reads 100.

Why does Aroon move in steps?

It counts whole candles since the extreme, and each candle of age is worth 100 ÷ 14, about 7 points, with the default length. So the line slides down in even steps while no new high or low arrives, then jumps straight to 100 when one does.

Related: Average Directional Index, Directional Movement Index, Parabolic SAR, Donchian Channels, every indicator.