Skip to content
Reversion Docs

Indicator Formula

Technical Details — Aroon Oscillator (Aroon)

Section titled “Technical Details — Aroon Oscillator (Aroon)”

Overview

Section titled “Overview”

The Aroon Oscillator calculates the difference between Aroon Up and Aroon Down, where each measures how recently the highest high or lowest low occurred.

Key Concepts:

  • Aroon Up: Measures recency of highest high in the period
  • Aroon Down: Measures recency of lowest low in the period
  • Oscillator: Difference between Up and Down (-100 to +100)
Mathematical Derivation

Step 1 — Calculate Aroon Up

Section titled “Step 1 — Calculate Aroon Up”

Purpose: Measure how recently the highest high occurred.

$$AroonUp = \frac{n - BarsSinceHighestHigh}{n} \times 100$$

Where:

  • $$n$$ = Period
  • $$BarsSinceHighestHigh$$ = Number of bars since the highest high in the window

What This Measures: How close the most recent high is to the current bar (100 = just happened)

Step 2 — Calculate Aroon Down

Section titled “Step 2 — Calculate Aroon Down”

Purpose: Measure how recently the lowest low occurred.

$$AroonDown = \frac{n - BarsSinceLowestLow}{n} \times 100$$

What This Measures: How close the most recent low is to the current bar

Step 3 — Compute Oscillator

Section titled “Step 3 — Compute Oscillator”

Purpose: Net the two into a single value.

$$AroonOsc = AroonUp - AroonDown$$

What This Measures: Net trend direction: positive = bullish, negative = bearish

Compact Formula Summary

$$AroonUp = 100 \times (n - BarsSinceHigh) / n$$ $$AroonDown = 100 \times (n - BarsSinceLow) / n$$ $$AroonOsc = AroonUp - AroonDown$$

Default: Period = 14

Complete Calculation Example

Period = 14. Highest high was 2 bars ago, lowest low was 10 bars ago:

Aroon Up = (14-2)/14 × 100 = 85.7 Aroon Down = (14-10)/14 × 100 = 28.6 Oscillator = 85.7 - 28.6 = +57.1 (bullish — recent highs dominate)

Key Takeaways from the Example
  1. Time-focused: Aroon doesn’t care how high the high was — only how recent
  2. Quick transitions: A new high immediately pushes Aroon Up to 100
  3. Decays linearly: Each bar without a new high/low reduces Aroon by 100/n points