The Aroon Indicator: My Love-Hate Relationship with This Trading Tool

I've been tinkering with the Aroon indicator lately, and honestly, it's been both enlightening and frustrating as hell. This technical tool supposedly measures whether a security is trending by tracking new highs or lows within a calculation period (typically 25 days).

When Aroon Up crosses Aroon Down, they say it signals a potential trend change. Sure, that sounds nice in theory! And when Aroon Up hits 100 and stays close while Aroon Down hovers near zero, you're supposed to believe in a solid uptrend. Reverse the situation, and apparently, you've got a downtrend.

But from my experience? It's not that simple.

Tushar Chande developed this indicator back in 1995, naming it after the Sanskrit word "arun" meaning "dawn" or "early light." How poetic! Yet I've found myself sitting in the dark plenty of times following these signals blindly.

Yes, you can apply it to stocks, commodities, forex, and crypto on various timeframes. And yes, there's this fancy third line called the Aroon Oscillator (Aroon Up minus Aroon Down) that supposedly gives you extra insight into trend momentum.

The marketing pitch is that Aroon is a "leading indicator" that predicts future price movements rather than relying on historical data. Except when it doesn't work - which happens frequently in sideways markets, when I've lost more than I care to admit.

Everyone recommends pairing it with other indicators like moving averages, RSI, and Bollinger Bands. Of course they do! Because alone, it's about as reliable as a weather forecast two weeks out.

I've noticed many trading platforms push this indicator hard, though they conveniently bury the disclaimer that no indicator is infallible. No shit! After watching my positions tank despite "perfect" Aroon signals, I've learned that lesson the expensive way.

If you're going to use this thing, please don't make my mistake of treating it as gospel. It's just one flawed tool in a toolkit that requires proper risk management and a healthy dose of skepticism.

No bullshit, just my painful experience trying to extract profit from this supposed oracle of market trends. ☮️