Aroon Oscillator is a technical analysis tool used to gauge the strength of a trend at the current price. It can also be used to ascertain if the trend will continue.
If you are trading with Olymp Trade you can use the Aroon indicator to determine the direction and strength of a trend, as well as find the points of its reversal.
Ideally the indicator is made up of two lines: the blue Aroon Up line and the yellow Aroon Down line.
Each line moves along the 0 and the 100 levels respectively – quite so often crossing to level 70, 50 and 30 to signal safe entry points for traders.
Activating the Oscillator in Olymp Trade.
If you already have a trading account, login and follow the instructions below to activate the indicator.
- Now locate the indicator button on your chart to view all indicators.
- Scroll to Aroon and click on it once to activate.
Maintain the indicator settings at period 25 and change the oscillator colors/thickness if you need to.
Opening a winning down trade with the Aroon Oscillator.
There are three signals that you need to watch out for to open a winning down trade in Olymp Trade.
The first signal is a downtrend on the chart – easily seen with naked eyes.
The second signal should be the Aroon Up line running below a level of 30.
And the third signal – the Aroon Down line running above a level of 70.
It also helps if Aroon Up and Aroon Down are running parallel to each other because then, that’s an extra confirmation that the downward trend is stronger.
How to use this indicator to open quality down trades – signals based on trend reversal.
Look for these four signals to open a winning down trade: –
- The Aroon Up line must fall below 70.
- The second signal is when the Aroon Down line rises up to meet it.
- Third, look for an intersection between the two lines.
- Finally, ensure that both lines are on their boundaries of 30 and 70.
Conditions for Opening a winning UP trade with the Aroon Oscillator.
Confirm that these three signals have formed on your chart to open an UP TRADE.
The first signal should be an upward trend in the chart – easily picked with the naked eye.
The second signal should be the Aroon Up line running above a level of 70.
And the third signal should be the Aroon Down line running below a level 30.
It helps if the Aroon Up and Aroon Down lines run parallel on their positions. This shows a stronger up trend.
How to open quality UP trades with the Aroon Oscillator – signals based on trend reversal.
If you continuously see these four signals in your chart, consider that an eminent reversal of trend and know that the price of the asset you are trading is about to rise up again.
- The first signal is the Aroon Up line rising above 30.
- The second signal is of the Aroon Down line falling down to meet it.
- Make sure the two lines cross at some point
- And lastly, ensure that both lines are on the boundaries of 30 and 70 respectively.