World Surveillance Group Inc (fka WSGI)

[lowtrade]

Nerd


There have been many many old posts about Aroons. Going back in all my posts to pick out some would take longer than starting over, so here goes.

Aroon were new to me 2 months ago, but after study here's my take. Aroons are good for manipulated stocks (OTC:BB) because the formula does not use PPs figures in it. It is determined by time and amount of trades between points. more of a momentum indicator, but not really. I've seen it called a trend indicator some places and a momentum indicator others.

IMO aroon's are a Trend signal that shows momentum, with it's cross point and you have to take your mind out of the Horz mode and put it into Vert mode. Meaning it will not predict the height of PPs move, but the way PPs will move over time. (go up or go down) Because of this I use DMI with it to determine strength of expected trend and look for chart patterns to determine targets.

That said Aroon does seem to give some PPs height indication by the point of cross. If it crosses low 30 line or so weak move, If it crosses at the high line 70, move seems to be stronger.

A trend only occurs if the up line and down line are opposite each other, one below 30 and one above 70. Any combination between shows no trend. The trend line at the top (above 70) is the way the trend will go.

If you see both at the top or bottom there is no trend, but you can expect the next move to be opposite where they are. If at the bottom expect the next trend to be up and vise versa.

If both line run together from top or bottom, it signals accumulation as the next trend will continue like the last trend. If the last trend was an up trend and both lines are at top you expect the next trend to be a down trend, but if they travel together to the bottom accumulation is occurring for another continuation of the up trend instead of a down trend as expected by them being at top together.

The only other thing I can think of to mention would be the time of aroon to choose to look at. Seems the 20 day is good for longer term (1 to 3 month), the 8 day is good for the mid term (1 to 3 weeks) and the 3 day good for the short term (1 to 3 days)

Here is a little teaching aid I made, hope this all helps;