Wednesday, August 29, 2012

Aroon Oscillator | Description, Calculations, Examples, Download

Aroon Oscillator
 Aroon oscillator is a expansion of Aroon indicator. It is calculated by subtracting the Aroon Down from the Aroon Up. The resultant number will oscillate between 100 and -100. 

 


Aroon Oscillator Formula


 Aroon Oscillator = AroonUp - AroonDown.



Trading signals for the Aroon Oscillator:



  • Above zero signals an up-trend.

  • Below zero indicates a down-trend.

  • The farther away Aroon Oscillator is from the zero line, the stronger the trend.

  • Above 50 is considered a strong uptrending market

  • Below -50 means that the market is trending lower.

  • Near 0 means that the market is in transition and not trending.

  • Above 50 means strong uptrend.

  • Below 50 means strong downtrend.

A decrease of the Aroon Oscillator from above the 50 line shows that the uptrend is consolidating and is reversing direction downward. When the Aroon Oscillator hovers around the zero line over time, then the market is in a directionless period.

When the oscillator moves toward -50 from the zero line, the market is beginning to trend downward. And when the Aroon Oscillator is below -50, then the market is in a strong downtrend.

When the oscillator begins to move upward towards the zero line, the downward trend is slowing down and beginning to reverse direction.

In addition, when the Aroon Oscillator moves higher from the zero line, then the market is moving from a period of non-trending to a period of uptrending.



In Summary:





    • Buy when Aroon Oscillator is above zero line.



    • Book profit/loss and Exit when Aroon Oscillator moves below 50.



    • Sell when Aroon Oscillator is below zero line.



    • Book profit/loss and Exit when Aroon Oscillator moves above -50.






Example


This is the technical chart of EURUSD currency pair on H1 timeframe using Aroon oscillator.

Aroon Oscillator
Aroon Oscillator


The buy signal was given by Aroon oscillator when it moves above zero line and exit signal was signal when it moved below 50. During this period, EURUSD trading gives a profit of good pips from point 1 to point 2, mentioned in the chart.

Download Aroon Oscillator




Monday, August 27, 2012

Gold Weight Conversion Table

Gold Weight Conversion Table
 This is very useful table to convert Gold into different units as required:







To convert from


To Multiply by
Troy ounces Grams 31.1035
Million ounces Tonnes 31.1035
Grams Troy ounces 0.0321507
Kilograms Troy ounces 32.1507
Tonnes Troy ounces 32,150.70
Kilograms Tolas 85.755
Kilograms Taels 26.7172
Kilograms Bahts 68.41
Troy ounces Grains 480
Troy ounces Avoirdupois ounces 1.09714
Troy ounces Penny weights 20
Avoirdupois ounces Troy ounces 0.911458

Short tonne

Metric tonne 0.9072

Aroon indicator | Description, Calculations, Examples, Download

Introduction to Aroon Indicator


The Aroon indicator developed by Tushar Chande, indicates if a price is trending or in range trading. It can also reveal the beginning of a new trend, its strength and also allows you to anticipate changes from trading ranges to trends. AroonDown and the AroonUp indicators are used together and combined are called the Aroon indicator. The Aroon indicator is often used to determine whether a stock is trending or not and how stable the trend is.

AroonUp measures how long it has been since prices have recorded a new high within the specified period. If the current price is higher then the user defined number of periods before it, then the AroonUp value is %100. In other words, it's a new high for that period. If a new low occurred during the period then AroonDown will be zero. Otherwise it returns a percent valve indicating the time since the new high occurred.



AroonDown measures how long it has been since prices have recorded a new low within the specified period. If the current price is lower then the user defined number of periods before it, then the AroonDown value is %100. In other words, it's a new low for that period. If a new high occurred during the period then AroonDown will be zero. Otherwise it returns a percent valve indicating the time since the new low occurred.

Another indicator, the Aroon Oscillator, can be constructed by subtracting AroonDown from AroonUp.

Why to use Aroon indicator?


The best thing about this indicator is that it identifies the trend for you first and foremost. You don’t have to make an effort to assess what the current market trend is as the indicator will do it for you. The trend will be found out keeping in mind the currency pair you are trading. Once the trend has been established, the indicator will then work out whether there is any probability of the trend reversing or altering its course all of a sudden. A line chart is use to present this indicator visually. This is the best way of explaining this to the newbie traders who are not experienced enough to be able to assess it based on their knowledge.

As you can see from the name - Aroon helps to predict important changes in the market. Namely, the transition from flat to trend and vice versa. From Sanskrit, the word Aroon translates as "Light of the Dawn", which is symbolic, since the indicator, in a calm market, really gives its signals in advance.

Arun, the trend indicator (Aroon) consists of two lines: Aroon up (green line) and Aroon down (red line).

The main advantage of the indicator is that it is visually intuitive and simple. A minus is a slight delay in the signals with high volatility. But, for the sake of justice, it is worth saying - this is a minus of almost all technical indicators.

The Aroon indicator is a conceptually simple technical indicator. Developed in 1995, it is newer than many of the more popular technical indicators. But for some reason, not all charting web sites offer the Aroon indicator. Yahoo! Finance doesn’t offer it. Neither does CME Group. Two charting web sites that do are Stockcharts and Barchart.

Calculation


Calculation of the two outputs of the Aroon indicator Aroon High and Aroon Low,  involves only a single parameter, a span parameter specifying the number of bars over which to calculate the indicator. The most common setting is 25 days. The formulas are:

Aroon indicator




Interpretation


Tushar describes the following trading signals :

1. If Aroon down under 50, signals that the bearish trend is weakening

2. If Aroon up under 50, indicates that the bullish trend is weakening

3. If Aroon down above 70, signals a strong bearish trend

4. If Aroon up above 70, signals a strong bullish trend


  • The green line in the 70-100 zone is a strong growing trend;

  • The green line in the 50-70 zone is a high probability for an increasing trend;

  • The green line in zone 50-30 is a fading growing trend;

  • The green line in zone 30-0 is the absence of a growing trend;

  • The red line in the 70-100 zone is a strong falling trend;

  • The red line in the 50-70 zone is a high probability for a falling trend;

  • The red line in zone 50-30 is a fading down trend;

  • The red line in zone 30-0 is the absence of a falling trend;

  • Parallel movement of lines - consolidation of the market;

  • Crossing lines - changing the trend.

Deal for Sale



  • The lines intersected. Red from above and is in the zone above 70. Green from below and is in the area below 30. Sell.

  • Stop Loss put on 3-5 points above the previous local extremum.

  • Take Profit set at a distance of two and a half times longer than Stop Loss. That is, if the SL stands at minus 20 points, then TP is set at plus 50 points from the current price.

  • When crossing the Aroon lines, we close the deal, without waiting for the triggering of the SL or TP orders.

For a transaction to buy the reverse terms.

How to read Aroon Indicator


1. Below zero signals a bearish trend

2. Above zero indicates a bullish trend

3. The farther Aroon indicator from the zero line , the stronger the trend

Weakness in the market is indicated when AroonDown remains between 0 and 30 for an extended period of time. If AroonDown and AroonUp follow similar movement patterns, this is a sign of consolidation. Finally, AroonDown crossing below AroonUp is considered a bearish sign.

When AroonUp is at 100, a new uptrend may have begun. If it remains persistently between 70 and 100, and the AroonDown remain between 0 and 30, then a new uptrend is underway. If AroonUp dips below 50 then the trend has lost momentum.

When AroonDown is at 100, a new downtrend may have begun. If it remains persistently between 70 and 100, and the AroonUp remain between 0 and 30, then a new downtrend is underway. If AroonDown dips below 50 then the trend has lost momentum.

Trading ranges and consolidation: When AroonUp and AroonDown move in parallel (horizontal, sloping up or down) with each other at roughly the same level, then price is range trading or consolidating.

New Trend, if the AroonUp crosses above the AroonDown, then a new uptrend may soon start. Conversely, if AroonDown crosses above the AroonUp, then a new downtrend may soon start.

Examples


1. Below is the technical chart of Gold on H4 timeframe using Aroon indicator.

Aroon indicator
Aroon indicator


As you can see in the above chart, Gold price started its uptrend journey as soon as there is a crossover between AroonUp and AroonDown line. AroonUp line above 70 and AroonDown line down below 30 was the final signal to buy.

2. Below is the technical chart of Crude using Aroon indicator.

Aroon indicator
Aroon indicator


As you can see in the above chart, the downtrend in Crude started when AroonUp and AroonDown crossover happens and are below 30 and above 70 respect.

How to filter false signals from Aroon indicator?


Like others, Aroon indicator also gives false signals sometimes. You must learn that no indicator is perfect and you need to filter out false signals from that indicator. 


Remember, there are no indicators on Forex that are not mistaken. Aroon (Arun, trend indicator), like any other, requires confirmation of its signals. When building your own trading system, use several indicators.


The best way to filter out false signals from Aroon indicator is to use 63-days Exponential Moving Average (EMA) indicator.


Now, if the price is trading above 63-days EMA AND there is a buy signal from Aroon indicator - take long position and vice-versa.

On the other hand, if you get buy signal from Aroon indicator but the price is trading below 63-days EMA, do not take that call. It's a false signal.



Download Aroon indicator for MetaTrader



Wednesday, August 22, 2012

List of technical indicators for tutorials

List of technical indicators for tutorials
 I've decided to start series of articles on technical indicators with their explanation, charts, videos etc. I'll take examples from Forex and/or stock market to explain them.

Following is the list of indicators, which you'll find under tutorials:



EMA


Donchian


Doda-Bollinger Bands indicator for MetaTrader4


ADX


Doda-Stochastic Indicator for MetaTrader


BBSqeeze


Ichimoku Kinko Hyo


Tutorial on Moving Average Convergence/Divergence (MACD) indicator


Aroon indicator | Description, Calculations, Examples, Download


Aroon Oscillator


Average Directional Movement Index (ADX) Technical Indicator Tutorial


Parabolic SAR Technical Indicator Tutorial and Examples


Average True Range (ATR) Indicator Tutorial


Understanding Stochastic Oscillator


Understanding Relative Strength Index (RSI)


Guide to MACD Indicator and MACD Histogram



Guide to ADX Indicator (Average Directional Index)


Beginners Guide to Moving Average


Price Channel Technical Indicator


Accumulation Swing Index Indicator (ASI)


Linear Regression Technical Indicator


Guide to Alligator Indicator


Guide to Accumulation Swing Index Indicator (ASI)




Technical indicators starting with A 

Aroon Indicator

Aroon Oscillator

Average Directional Movement Index (ADX)

Average Directional Movement Index Rating (ADXR)

Average True Range (ATR)



Technical indicators starting with B 

Balance of Power

Bollinger Bands

Bollinger Bands - Fibonacci Ratios

Bollinger Bandwidth

Bollinger Percent B



Technical indicators starting with C 

Chaikin’s Volatility

Chande’s Dynamic Momentum Index

Chande’s Momentum Oscillator (CMO)

Chande’s QStick

Chande’s Range Action Verification Index (RAVI)

Chande’s TrendScore

Chande’s Variable Index Dynamic Average (VIDYA)

Chaos Accelerator Oscillator

Chaos Alligator Oscillator

Chaos Awesome Oscillator

Chaos Fractals

Chaos Gator Oscillator

Choppiness Index

Commodity Channel Index (CCI)

Coppock Curve



Technical indicators starting with D 

Darvas Box

DeMark’s DeMarker I

DeMark’s Projected Range

DeMark’s Range Expansion Index (REI)

Detrended Price Oscillator (DPO)

Directional Movement Index (DX)

Directional Movement System

Disparity Index

Donchian Channel

Double Exponential Moving Average (DEMA)

Double Stochastic Oscillator



Technical indicators starting with E 

Ehlers Fisher Transform

Ehlers Laguerre Relative Strength Index

Ehlers MESA Adaptive Moving Average (MAMA and FAMA)

Ehlers Relative Vigor Index (RVI)

Elder-Ray Bear Power

Elder-Ray Bull Power

Elliot Oscillator



Technical indicators starting with F



--



Technical indicators starting with G 

Gann HiLo Activator

Gann Swing Oscillator

Gann Trend Oscillator



Technical indicators starting with H 

Hull Moving Average



Technical indicators starting with I 

Ichimoku Kinko Huo

Inertia



Technical indicators starting with J 



--



Technical indicators starting with K 

Kaufman's Adaptive Moving Average (KAMA)

Kaufman's Efficiency Ratio

Keltner Bands (Based on ATR)

Keltner Channels

Kurtosis Indicator



Technical indicators starting with L 

Linear Regression Acceleration

Linear Regression Indicator

Linear Regression Slope



Technical indicators starting with M 

MACD

MACD-Histogram

MACD-Line

Mass Index

McClellan Histogram

McClellan Oscillator

McClellan Summation Index

McGinley Dynamic

Momentum

Moving Average (MA)

Moving Average Envelope

Moving Average of RSI

Moving Slope Rate of Change



Technical indicators starting with N 



--



Technical indicators starting with O 



--



Technical indicators starting with P 

Parabolic SAR

Percentage Price Oscillator

Pivot Points - 24-Hour Cycle

Pivot Points - 24-Hour Cycle - Fibonacci Ratios

Pivot Points - Monthly Cycle

Pivot Points - Monthly Cycle - Fibonacci Ratios

Pivot Points - Weekly Cycle

Pivot Points - Weekly Cycle - Fibonacci Ratios

Polarized Fractal Efficiency



Technical indicators starting with Q 

Quantitative Qualitative Estimation (QQE)



Technical indicators starting with R 

Rainbow Charts

Rainbow Oscillator

Rate of Change (ROC)

Recursive Moving Trend Average

Relative Momentum Index (RMI)

Relative Strength Index (RSI)

R-Squared (R2)



Technical indicators starting with S 

Schaff Trend Cycle

Stochastic Momentum Index

Stochastic Oscillator



Stochastic RSI Oscillator

Stoller Average Range Channels (STARC Bands)

Support and Resistance



Technical indicators starting with T 

T3 Moving Average

Trailing Stoploss Levels (Volatility-Based)

Trailing Stoploss Reversal Level

Trend Continuation Factor (TCF)

Trend Intensity Index (TII)

Trend Oscillator (tosc)

Trend Trigger Factor (TTF)

Triple Exponential Average (TRIX)

Triple Exponential Moving Average (TEMA)

True Strength Index (TSI)



Technical indicators starting with U 

Ulcer Index

Ultimate Oscillator



Technical indicators starting with V 

Volatility Quality Index



Technical indicators starting with W 

Williams Percent Range (%R)

Friday, August 17, 2012

Gold weekly technical chart | 17-Aug-2012

 Below is the technical chart of Gold, using Ichimoku, Doda-Donchian and Doda-Bollinger Bands indicator.

Gold weekly technical chart
Gold weekly technical chart


Gold is currently trading around $1615. For medium term trend, we use weekly chart and for long term, we use monthly chart. Above is the weekly chart.

The price of Gold is trading below kumo, which is a sell signal. It is trading below Doda-Bollinger Bnads - again sell signal. The only positive point is that it is trading above Doda-donchian line. All that means, the technical signals are mixed and are not clear. So, one should avoid trading in Gold as of now.

Now, the question arises, when to buy or short-sell in Gold. The answer is again in the above chart.

If it closes above kumo and Doda-Boolinger bands i.e. 1691.44, buy it. It will again start its bull run from there.

If it breaks its major support level viz. 1524.47, do short selling at that level.

Doda-Donchian ver 2.0 Released

 Based on the feedback and some pending features, I'm releasing Doda-Donchian version 2.0 today. Showing sample chart of EURUSD on ti...