ZigZagHighLow

Description

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. 

Input Parameters

Parameter Description
price h The price to be used when looking for a high swing point.
price l The price to be used when looking for a low swing point.
percentage reversal The minimum percentage of price change for a swing to be detected.
absolute reversal Additional value in dollars that can be added to the minimum price change and ATR change to increase the distance between swing points.
atr length The period for ATR calculation.
atr reversal The factor by which the ATR value is multiplied.
tick reversal

Additional value in ticks that can be added to the minimum price change and ATR change to increase the distance between swing points.

Plots

Plot Description
ZZ The ZigZagHighLow plot.

Further Reading

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.

Example*

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

  Past performance is no guarantee of future performance.