The ZigZagHighLow study is designed by Sylvain Vervoort as part of his "1-2-3 Wave Count" and "V-Trade" systems. ZigZagHighLow plot identifies and connects swing points if the difference between their prices exceeds a certain calculated value. This value is equal to the specified percentage of price change plus Average True Range (ATR) multiplied by a factor. This sum can include an additional constant to increase the distance between the swing points.
A high swing point is a bar with a selected price (high, low, open, or close) greater than that of the previous and the following bar. Conversely, a low swing point is a bar with a selected price lower than that of the previous and the following bar. Once all the irregularities are smoothed out, the study plot is a zigzag line showing generalized price moves up and down.
Note that the last segment of the plot can change its direction drastically as a considerable future market move may occur.
In Sylvain Vervoort’s sytems, market moves are regarded as complex and consisting of a certain number of moves up or down. ZigZagHighLow can help visualize these moves. If you stick to the "V-Trade" system, which is designed for usage on the Renko Bars charts, consider optimizing the "tick reversal" input parameter. For "1-2-3 Wave Count System", consider optimizing the "absolute reversal" parameter.
Note to thinkScripters:
If referencing this study, consider including the EnableApproximation function as only non-filtered swing points are plotted.
||The price to be used when looking for a high swing point.|
||The price to be used when looking for a low swing point.|
||The minimum percentage of price change for a swing to be detected.|
||Additional value in dollars that can be added to the minimum price change and ATR change to increase the distance between swing points.|
||The period for ATR calculation.|
||The factor by which the ATR value is multiplied.|
Additional value in ticks that can be added to the minimum price change and ATR change to increase the distance between swing points.
||The ZigZagHighLow plot.|
1. "The 1-2-3 Wave Count" by Sylvain Vervoort. Technical Analysis of Stocks & Commodities, May 2013.
2. "The V-Trade. Part 7: Technical Analysis—V-Wave Count" by Sylvain Vervoort. Technical Analysis of Stocks & Commodities, September 2018.
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.