Strategy Lab | An Aroon indicator-based trading strategy with a strong back-test performance

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The strategy gauges the short-term market trend and dynamically takes position in the nearest expiry ATM (at-the-money) Options instrument

July 29, 2022 / 12:54 PM IST

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AlgoBulls The Aroon indicator, a trend following indicator, developed by Tushar Chande, indicates if a price is trending or is in a trading range. The charm of this indicator is that it reveals the beginning of a new trend and its strength. Aroon indicator has two components – AroonDown and the AroonUp indicators. AroonUp measures how long it has been since prices have recorded a new high within the specified period. A value of 100 suggests the stock or index has touched…