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How does Aroon oscillator work?
The Aroon oscillator is a technical analysis tool used to measure the strength and direction of a trend in a financial market. It is based on the Aroon indicator, which was developed by Tushar Chande in 1995. The oscillator consists of two lines: the Aroon-Up line and the Aroon-Down line.

The Aroon-Up line measures the number of periods since the highest price within a given period, while the Aroon-Down line measures the number of periods since the lowest price within the same period. These lines oscillate between 0 and 100, indicating the strength of the trend. When the Aroon-Up line is above the Aroon-Down line, it suggests that the uptrend is stronger, and vice versa.

Traders use the Aroon oscillator to identify potential trend reversals or confirm the continuation of an existing trend. When the oscillator crosses above the zero line, it indicates the beginning of an uptrend, while a cross below zero signals the start of a downtrend. Additionally, the divergence between the price and the oscillator can indicate potential shifts in market direction.

By analyzing the relationship between the Aroon lines and their oscillator, traders can make informed decisions about entering or exiting positions, thereby improving their trading strategies and overall profitability in the market.

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