The Aroon indicator is relatively new and has not yet become as popular in binary options trading as the Stochastic Oscillator or MACD. Despite this, it is available on many trading platforms, including Pocket Option.
You can trade using the Aroon indicator alone, but it generates more effective signals when combined with the Moving Average indicator, which allows you to trade binary options directly on the broker's platform without using the MetaTrader 4 terminal.
Also, keep in mind that you can start trading with additional funds by using promo codes for account top-ups from Pocket Option, and to improve your results with this strategy, you can use a promo code to cancel a losing trade worth $10.
The Aroon Indicator Explained
While the Moving Average indicator is well established and widely understood, the Aroon indicator is still relatively new and unfamiliar to many traders. Simply put, it is an oscillator consisting of two lines that move within a range of 0 to 100. The calculation is based on the number of bars since the most recent highest or lowest price was formed. As soon as a bar reaches a new high or low, the indicator hits a value of 0 or 100:
Price movements can be strong both on large timeframes (globally) and on small timeframes (locally). As a result, the indicator may not always reach its maximum or minimum values, instead forming peaks and troughs at intermediate levels such as 30, 50, or 80.
Installing the Aroon EMA Strategy Indicators
To start using the Aroon EMA strategy on the Pocket Option platform, you need to add both indicators to your chart via the indicator panel:
No changes are needed in the Aroon indicator settings — leave the parameter at 25:
In the Moving Average indicator, set the period to 30 and change the type to EMA:
How to Trade Using the Aroon EMA Strategy
The trading rules for these indicators are straightforward. Since Aroon is an oscillator with two lines, you need to watch for crossovers: when the blue line crosses the red line from top to bottom, buy a Put option; when it crosses from bottom to top, buy a Call option:
The EMA rule is even simpler: when the price is above the EMA line, that is a Call signal; when it is below, that is a Put signal.
One important point to note: although Aroon is an oscillator, it performs best in trending markets, as it tends to generate many false signals during sideways price action. Before using it on Pocket Option, it is worth studying how to identify a trend and trade with it.
Trade Examples in Pocket Option
Combining all the rules, the strategy requires the following conditions to be met simultaneously:
- The Aroon indicator lines must cross each other.
- The price must be above or below the EMA line.
Keep in mind that this strategy is designed for the M1 timeframe, with an expiration of 5 candles.
Example of a Call option trade in Pocket Option:
The price was in an uptrend and trading above the EMA line. When the Aroon lines crossed, it was possible to buy a Call option with a 5-minute expiration.
Example of a Put option trade in Pocket Option:
The same conditions apply in reverse: signals appeared at the start of a downtrend, and a Put option is bought with the same expiration time.
Conclusion
The Aroon EMA strategy is simple and accessible even for beginners. Its main advantage is that it can be used directly on the Pocket Option platform, since all the required indicators are available there.
That said, always test any strategy on a demo account first — work through all the rules and possible scenarios before moving to a live account.
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