A Zigzag-Based Indicator for Confirmed Trend Direction
Summary
The document describes a binary trend indicator derived from Zigzag turning points. It tracks candidate troughs and peaks, then sets an upward or downward confirmation threshold using either a percentage reversal or a fixed point amount. When price crosses the relevant threshold while the Zigzag direction agrees, the indicator returns a positive or negative trend signal; otherwise, it returns zero.
The author claims that confirmed signals are not revised and can therefore be used for both historical and current trend direction. The excerpt includes implementation logic but provides no performance tests, market or timeframe specification, or comparison with simpler trend filters. Since Zigzag calculations can depend on later price movement to establish turning points, the claim of non-revisable signals should be verified against the implementation and data timing before using it in a backtest or live system.
Key ideas
- The indicator uses Zigzag turning points to establish candidate reversal levels.
- A percentage or fixed-point threshold determines when a trend direction is confirmed.
- It emits positive, negative, or neutral values for uptrends, downtrends, or unconfirmed conditions.
- The document claims signals are not revised but offers no tests to substantiate that property.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.