# Aroon MT4 Stock Indexes Indicator and Aroon MT4 Indicator Indices Trading Signals

Developed by Tushar Chande

This MT4 Indices Indicator is used to determine if a trading instrument is trending or not.

It is also used to indicate how strong the indices trend is.

It is also used to identify the beginning of a trend, the name its name which means morning or dawn.

This MT4 Indices Indicator has two lines:

• Aroon UP

• Aroon DOWN

## Aroon UP

Percentage of time between the start of a time period and the highest point that stock indexes price has reached during that period.

If stock indexes price sets a new high, Aroon UP will be 100 - for each new high it will stay at 100. However, if stock indexes price moves down by a certain percentage, then that percentage is subtracted from the 100 and Aroon UP starts to move down. This means that if Aroon UP stays at 100 then stock indexes price is making new highs but when it starts to move down then stock indexes price is not making new highs.

If however stock indexes price is making new lows for a particular stock indexes price period then Aroon UP will be at zero

Calculation

Aroon UP is a percentage of time between stock indexes price period and highest point.

If you use 10 stock indexes price periods for calculation:

Example 1: Highest stock indexes price was 1 day ago

Then if the highest point was yesterday, i.e. 1 day before then

10 stock indexes price periods minus 1 day= 9

9/10 in percent terms = 90

Aroon UP will be at 90

Example 2: Highest stock indexes price was 5 days ago

If the highest point was 5 days ago then

10 stock indexes price periods minus 5 = 5

5/10 in percent = 50

Aroon UP will be at 50

## Aroon DOWN

This is calculated the same as Aroon UP but this time using the lowest point instead of the highest point.

When a new low is set Aroon DOWN is at 100 and when a new high is set it will move to zero.

## MT4 Indices Technical Indicator and Generating Indices Trading Signals

This MT4 Indices Indicator uses the 50 % level to measure momentum of the trend.

Aroon UP dipping below 50 is an exit signal if you had opened a buy indices trade.

### Sell Indices Trading Signal and exit signal

Aroon DOWN below 50 is a technical sell indices signal.

Aroon DOWN rising above 50 is an exit signal if you had opened a sell indices trade.