Aroon Oscillator (from Aroon Indicator) = Bearish indicator - Bullish indicator
The number of signals generated by Aroon Oscillator is significantly smaller than created by Aroon Indicator. So it is better to use it for filtration rather than for decision-making in the market.
The main values of Aroon Oscillator are extremes reached by the indicator within a trend movement and also the moment of crossing zero line..
When Aroon Oscillator is above 50, it indicates a strong bullish trend.
At the same time it is important to consider the following:
When Aroon Oscillator is below -50, it indicates a strong bearish trend.
It is important to take into consideration the following:
Aroon Oscillator above 50 and below -50 indicates a strong new trend. In this instance, using counter-trend or flat market methods would be inappropriate.
Another option to use the oscillator is trading in the direction of the breakout of zero line:
Aroon_Period = 10
Filter = 50