Description
The ZigZagSign study filters out minor market moves, showing the price action in generalized form. The ZigZagSign plot connects swing points if the difference between their prices exceeds specified offset. A high swing point is a bar whose price is greater than that of the previous and the following bar; conversely, a low swing point is a bar whose price is 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 uptrend and downtrend segments of the price action.
Visualization of this study includes chart label, chart bubbles, and plot coloring. Before the price change accumulates the specified amount, trend state is defined as "Unconfirmed", which results in chart label showing this state with amount accumulated, and study plot is colored orange. After a significant rise or fall, the plot is colored green (for "Uptrend") or red (for "Downtrend"), each state is indicated with the chart label. Each swing point (and the last bar on chart) is accompanied with chart bubble showing the price change relative to the prior swing point.
Note that the last segment of the plot can change its direction drastically as a considerable future market move might occur.
Consider using EnableApproximation function when referencing this study as only non-filtered swing points are plotted.
Input Parameters
| Parameter | Description |
|---|---|
price
|
The price used to calculate swing points. |
reversal amount
|
The threshold price range between swing points to connect. |
show bubbles
|
Defines whether or not to display bubbles with price change next to swing points. |
show label
|
Defines whether or not to display chart label with trend state and price change. |
Plots
| Plot | Description |
|---|---|
ZZ$
|
The ZigZagSign plot. |
Example*
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.