A Two-Scale Fractal ZigZag for Highs, Lows, and Breakouts

Summary

This indicator marks turning points at two scales. Major highs and lows use a configurable lookback, set to 20 periods by default; minor points use half that lookback. It compares a lagged bar’s high or low with the surrounding range, then draws alternating major markers and separate minor markers. Average true range offsets the symbols from the price points for chart visibility.

The author suggests using the marked swings to identify 1-2-3 patterns or other breakout setups. The document provides the indicator’s calculation logic but no trading rules, test results, or performance evidence. Its lookback and marker settings are descriptive parameters, not evidence of predictive value. Because each point is identified using bars on both sides of the candidate bar, the marker appears with a delay; users should account for that timing when evaluating signals or building a backtest.

Key ideas

• The indicator identifies major swing points with a configurable lookback and minor points with half that period.
• Major points alternate between highs and lows, while minor points are plotted independently.
• Average true range offsets the markers from the identified price levels.
• The author proposes using the swings for 1-2-3 patterns or breakout strategies, but provides no performance evidence.
• The surrounding-bar comparison means a swing is confirmed only after later bars are available.

Tags

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