Aroon Indicator - Mathematics and stock indicators in Python 16 | Summary and Q&A

TL;DR

Learn about the Arun Indicator, which determines stock trends and their strengths, and how to calculate and use it in Python.

Key Insights

• 🙂 The Arun Indicator was developed by Tushar Shande in the mid-90s and is named after the Sanskrit word for "dawn's early light."
• 📈 It is a simple indicator that determines stock trends and their strengths.
• ⏳ The indicator has two lines: Arun Upline, which measures the time since the last high price, and Arun Downline, which measures the time since the last low price.
• ⌛ The indicator can be normalized by dividing it by the chosen time frame for better comparison.
• 📈 Examples using Apple and eBay stocks show the accuracy of the Arun Indicator in identifying trends.
• 💝 The indicator is more effective for long-term investing and may provide late signals for highly volatile stocks.
• 👻 Programming the Arun Indicator into Python allows users to graph and analyze the indicator themselves.

Transcript

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Questions & Answers

Q: What is the Arun Indicator and what does it measure?

The Arun Indicator is used to determine if a stock is trending and the strength of that trend. It measures the time since the last high or low price.

Q: How is the Arun Indicator calculated?

The Arun Indicator is calculated by dividing the time since the last high or low price by the chosen time frame and multiplying it by 100.

Q: Can the Arun Indicator be used for short-term trading?

While it is possible to use a shorter time frame, it is generally recommended to use a longer time frame, such as 15 to 20 days, for more accurate results.

Q: How can the Arun Indicator be used for comparing stocks?

By normalizing the indicator using the chosen time frame, it can be compared to other charts and displayed alongside them for comparative analysis.

Summary & Key Takeaways

• The Arun Indicator, developed by Tushar Shande, determines if a stock is trending and its trend strength.

• The calculation involves two lines: Arun Upline and Arun Downline, which represent the time since the last high and low prices, respectively.

• The indicator can be normalized by dividing it by the chosen time frame and is useful for comparing stocks.