Aroon Crossover (Trend)

Chande's Aroon: buys when Aroon Up crosses above Aroon Down — the market has set a new 25-bar high more recently than a new low — and sells when they cross back.

How It Works

1. Track how many bars have passed since the highest high and the lowest low of the last 25, and turn each into a 0-100 line: Aroon Up and Aroon Down.
2. Buy when Aroon Up crosses above Aroon Down — the market is setting new highs more recently than new lows, so the trend has turned up in time terms even before price confirms it by size.
3. Sell when Aroon Down crosses back above Aroon Up.

Worked example. A new 25-bar high three bars ago puts Aroon Up at 88, while the last low was 18 bars back, leaving Aroon Down at 28. Up has crossed above Down, so the strategy buys. Weeks later fresh lows start arriving and Down climbs back through Up, closing the trade.

The Math Behind The Indicators

Everything runs on closing prices of the traded timeframe: P is a close, P_t today's close, and N counts bars — one bar is one candle of that timeframe, so 20 bars on a 1h chart is 20 hours.

Aroon Up / Aroon Down

A trend gauge built from elapsed time rather than price size. Aroon Up asks how recently the window's highest high was set: 100 if it is today, decaying toward 0 as the high ages. Aroon Down does the same for the lowest low. When Up leads Down the market has been making fresh highs more recently than fresh lows, which is what a healthy uptrend looks like in time rather than in magnitude.

\[\mathrm{Up} = 100 \cdot \dfrac{N - \text{bars since }\max(H_N)}{N}, \quad \mathrm{Down} = 100 \cdot \dfrac{N - \text{bars since } \min(L_N)}{N}\]

Example: With N = 25, a high set 5 bars ago gives Aroon Up = 100·(25 − 5)/25 = 80, while a low set 20 bars ago gives Aroon Down = 100·(25 − 20)/25 = 20 — highs are fresh, lows are stale, so the trend reads as up.

Example Chart

Real Data54/ 100Composite score

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Resampled Data56/ 100Composite score

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