A Simplified ZigZag Indicator Using Price-Reversal Thresholds

Summary

This document presents a simplified ZigZag indicator design that tracks alternating price highs and lows without arrays. It maintains the current extreme, then confirms a reversal after price moves away from that extreme by a configurable threshold. The threshold can be expressed in pips or as a percentage, and the input price series can be customized. The indicator stores a fixed history of recent turning points and draws connecting segments, with a dotted segment showing the still-developing leg.

The author describes the version as easier to incorporate into strategies, including a Ross 1-2-3 pattern. No trading rules, market tests, or performance evidence are supplied. Because the current extreme is updated until the reversal threshold is reached, the latest pivot and unfinished leg can change as new prices arrive; users should distinguish confirmed turns from provisional ones. The displayed history is fixed in the provided implementation, though it can be extended manually.

Key ideas

• The indicator confirms alternating highs and lows when price reverses by a chosen pip or percentage threshold.
• It stores and draws a fixed set of recent pivot points without relying on arrays.
• The unfinished ZigZag leg follows the current extreme and can change before a reversal is confirmed.
• The indicator is presented as a building block for strategies, but no strategy evaluation or trading results are provided.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.