Description
ZigZagStepPattern is a candlestick pattern proposed by Sylvain Vervoort in his article in July 2013 issue of Technical Analysis of Stocks & Commodities. This technical indicator is based on the observation that certain patterns often form at high and low swing points, thus signifying that previous trend is about to reverse. High and low swing points are defined using the ZigZagHighLow technical indicator.
The UpStep pattern can signify reversal of downtrend and is identified upon any of the following conditions:
-
Low swing point candle is bullish and opens within the body of the previous candle (lower of the Open and Close included) and closes above it.
-
Low swing point candle of either color is followed by a bullish candle which opens within previous candle's body (lower of the Open and Close included) and closes above it.
The DownStep pattern can signify reversal of uptrend and is identified upon any of the following conditions:
-
High swing point candle is bearish and opens within the body of the previous candle (higher of the Open and Close included) and closes below it.
-
High swing point candle of either color is followed by a bearish candle which opens within previous candle's body (higher of the Open and Close included) and closes below it.
Input Parameters
| Parameter | Description |
|---|---|
price h
|
The price used in high swing point determination. |
price l
|
The price used in low swing point determination. |
percentage reversal
|
The threshold percentage of price between swing points to connect. |
absolute reversal
|
The absolute value to add to the price change (consisting of percentage change and ATR change components) in order to increase the distance between the swing points. |
atr length
|
Defines period for ATR calculation. |
atr reversal
|
Defines factor by which the ATR value is multiplied. |
Plots
| Plot | Description |
|---|---|
UpStep
|
The bullish ZigZag candlestick pattern. |
DownStep
|
The bearish ZigZag candlestick pattern. |
Further Reading
1. "The Step Candle Pattern" by Sylvain Vervoort. Technical Analysis of Stocks & Commodities, July 2013.