The Aroon indicator was developed by Tushar Chande in 1995 and is named after the Sanskrit word which means dawn's early light. It is primarily designed to signal the beginning of a new trend. The Aroon consists of two lines, Up and Down, which oscillate between 0 and 100. Up is a measure of how close the current bar is to the most recent Highest High for the Period. Down is a measure of how close the current bar is to the most recent Lowest Low for the Period. Eg, for a new High the Up value will be 100.
It is most often used to indicate the start of a new trend and as an indication of the strength of the current trend. A new trend is indicated by the Up and Down lines crossing each other. The strength of the current trend is shown by the lines being at or near 100.
Up = ((Period - Number of bars since High) / Period) * 100
Down = ((Period - Number of bars since Low) / Period) * 100