Introducing you to the Aroon Oscillator. This is a forex trading indicator which helps market technicians to trade in forex market without any difficulties. Aroon Oscillator cannot be used as a single tool to make all the trading related decisions but it can be used as a perfect tool for verifying trading decisions. If there are trend indicators on the main chart window this indicator will give a good combination. Aroon Oscillator is used by all level of traders. As it is very easy to use beginners find is easy to start trading with this indicator and the experienced traders find it reliable.
When you install Aroon Oscillator on your trading platform, your chart should look like this:
- Arron Horn oscillator
Aroon Oscillator is a histogram that fluctuates in a positive and negative territory. When this indicator is positive it forms blue and white bars and when the histogram is negative it forms a red and white histogram.
One should be very careful while using this indicator as not all the signals generated should be executed. The trend is the main concept you would need to trade profitably with this trading indicator. The market should be trending in the time frame you are watching and you should trade in the direction of the trade only. Suppose you are watching a USDJPY pair and it is up trending on an hourly time frame, now you are thinking to execute a trade based on H1 time frame analysis. Now you should look for buy positions only because the market is up trending.
Buying Conditions when using Aroon Horn Oscillator
- The market should be up trending.
- The market should be bouncing from the recent support level.
- The Aroon Oscillator should be positive.
- Place your long position when all of the above conditions are met.
- Place your stop loss just below the recent swing low.
- Take your profit when Aroon Horn Oscillator turns negative.
Selling Conditions when using Aroon Horn oscillator
- The market should be down trending.
- The market should be falling from the recent swing high.
- The Aroon Oscillator should turn negative.
- Place your short position when all of the above conditions are met.
- Place your stop loss just above the recent swing high.
- Take your profit when Aroon Horn Oscillator turns positive.
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