# The 5-minute Aroon Oscillator Strategy

The Aroon Oscillator is a very interesting indicator that was created relatively recently. It is not as popular as RSI, Stochastic, CCI or other prominent members of its category, but its potential is no less extensive. In this article, we will look at an Aroon indicator trading strategy in conjunction with the Arnaud Legoux Moving Average.

In essence, this is a classic combination of trend indicators and oscillators, but both of these tools are the latest developments in the field of online trading, so they are definitely worthy of careful consideration.

## Overview of the indicators

Aroon is an oscillator consisting of positive and negative lines that move in a separate window with a 100-point scale. The external form is classic for indicators of this type. The Aroon UP line is calculated using a formula that takes into account the number of price bars that appear after the formation of the last peak value for a certain period specified in the settings. The Aroon DOWN curve operates in a similar way, but the formula takes into account the number of price bars from the period minimum.

As soon as the current price bar becomes the maximum or minimum over a specified period of time, the corresponding Aroon oscillator curve immediately reaches 100% of the value. As we approach this level, there are intermediate positions, so the movement of the line is not always a zigzag from 0 to 100 percent.

Moving Average Arnaud Legoux (ALMA) is a new type of Moving Average created by Alan Hull in 2009. There is no fundamental difference compared to other MAs; however, the strength of the indicator lies in its practical results. The creator of this tool empirically managed to achieve the optimal balance between accuracy and speed. This is the eternal problem of Moving Averages: an increase in accuracy leads to a lag in signals for trading, and a reduction in the lag leads to a decrease in accuracy. An optimal balance between the two extremes was found in ALMA, which makes Arnaud Legoux a very attractive tool for technical analysis.

## Preparing for trading on the strategy

To understand the high potential of the indicators, they simply need to be tested in practice. You don’t need to change the standard parameters of the period, with the exception of appearance. Therefore, the preparation for trading on the Aroon strategy does not differ from similar instructions for other systems that we’ve considered on our website.

Step-by-step instructions:

• We open the TradingView (https://www.tradingview.com) chart for technical analysis and the Binomo (https://binomo.com/en) trading terminal (the best option for beginners), or any other company from the ranking on our site that you’re working with.
• We choose the same asset on both sites, and the main criterion is the percentage of profit. However, CRYPTO IDX is not suitable, as it is not on the live chart’s list since this tool is available exclusively on Binomo.
• Set the interval of the candlestick chart to 1 minute.
• We add two indicators to the live chart: “Aroon” and “Moving Average Arnaud Legoux.” You can find them manually in the built-in tools catalog, or by searching for them by copying and pasting the names.
• In the ALMA settings, go to the “Arguments” tab and set the parameters as follows: “Window size” – 30, “Indent” – 0.85, “Sigma” – 6. It is also recommended to increase the thickness of the curve in the “Style” tab.

The period parameters of the Aroon oscillator are left unchanged, but it is recommended to optimize the appearance as follows. In the “Style” tab, you should increase the thickness of both lines, as well as put a more contrasting fill color. For “Aroon Up” use green, and for “Aroon Down” use red. See the picture above.

## Indicator signals

ALMA is a classic Moving Average, so the signal is the intersection of the curve with the price chart. Aroon is an oscillator, so the trader should pay attention to the intersection of its lines.

• The signal for an increase – the green curve of the Aroon oscillator rises above the level of the red. The ALMA line falls below the price formations on the chart.
• The signal for a decrease – the breakout of ALMA by a downward red candle, as well as the exit of the red curve of the Aroon oscillator over the green.

The optimal moment to enter the market is the last seconds before the closing of the signal bar. A real-time countdown for the closing of the candlestick is displayed on the TradingView chart. This makes it possible to go to the trading terminal in the last 5-10 seconds to set up a trade and enter the market.

The expiration for each contract should be 4-5 minutes. The size of the investment in the trade should be determined according to the chosen strategy of money management. The smaller it is, the safer it will be in terms of risk. It is not recommended to invest more than 4-5% of the trading account balance. Binomo is best suited for this strategy. The company’s terminal is adapted for trading 1-5 minute fixed “Above/Below” contracts.

Similar Posts:

## Choosing A Reliable Broker

BrokerBonusMin DepositPayoutReviewOpen Account
2 types of bonuses\$100Up to 90%ReviewVisit Broker
Up to 100% deposit\$10Up to 90%ReviewVisit Broker
\$10Up to 91% *ReviewVisit Broker

Сomments