Rank: Newbie
Groups: Registered, Registered Users Joined: 2/29/2012(UTC) Posts: 8
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I'm just trying to understand how zig zag works as we move forward in time. Basically I have a custom indicator that triggers a when the peakbars() and troughbars() are under a certain value, and there is a trigger for a 7%, 12%, and 17% move. (3 different triggers)
My question is, does that 7,12,17% trough trigger hit once we have moved 7,12,17% above the last trough? or is the percentage based on the move in between the previous peak and trough (meaning if the stock dropped 15% in between the previous peak and trough, my 17% wouldn't hit but the other 2 would right after the previous trough)
Confusing and dangerous I know, but still it works so well in backtesting :)
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Rank: Advanced Member
Groups: Registered, Registered Users, Subscribers, Unverified Users Joined: 10/28/2004(UTC) Posts: 3,111 Location: Perth, Western Australia
Was thanked: 16 time(s) in 16 post(s)
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A VERY quick movie to demonstrate how ZigZag works and why it works perfectly in hindsight. Maybe one day I will make a better example, but this will do for now. wabbit [:D]
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Rank: Newbie
Groups: Registered, Registered Users Joined: 2/29/2012(UTC) Posts: 8
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So it has to move by the specified percentage above the dynamic trough then?
It has nothing to do with the move in between the previous peak and trough?
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Rank: Advanced Member
Groups: Registered, Registered Users, Subscribers Joined: 10/29/2004(UTC) Posts: 1,394 Location: Glastonbury, CT
Was thanked: 2 time(s) in 2 post(s)
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The last leg of the move is dynamic, meaning that it can change it's mind and the previous value will erase from plain sight.
IE: you made a new high a few bars ago and the asset is now starting to come back down. it has not retraced back beyond the specified percentage, but it has found new support and now continues to rally past the new high from just a few bars ago, you will see that the peak from the new high that occurred just a few bars back will disappear and that the line will now reflect the new high established today.
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Rank: Advanced Member
Groups: Registered, Registered Users, Subscribers, Unverified Users Joined: 10/28/2004(UTC) Posts: 3,111 Location: Perth, Western Australia
Was thanked: 16 time(s) in 16 post(s)
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... and there was me, thinking the movie file I made in just a few minutes demonstrated that point -- I know the quality wasn't the best, but I have already apologized for that.
As already mentioned in many, many posts on the forum and in the MS User Manual, the Zig() function and it's derivatives cannot be used to support real life trading in anything but a few very exceptional circumstances.
wabbit [:D]
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Rank: Newbie
Groups: Registered, Registered Users Joined: 2/29/2012(UTC) Posts: 8
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I'm sorry, I just now saw the attachment. Thanks all
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