Auto-Scaling ZigZag Sensitivity to Price Movement
Summary
The document describes a ZigZag indicator whose reversal step is determined automatically from price movement. Rather than setting a fixed point or percentage threshold, the user adjusts a single Scale parameter to control how sensitively the indicator identifies wave extremes. The described examples compare the default setting with lower and higher scale values, including overlays intended to show their different reversal patterns.
A lower scale is described as less sensitive, while a higher scale produces more frequent wave reversals. This offers a compact way to tune the granularity of swing detection across changing prices. The document provides no formula for how price determines the step, no chart data or numerical performance evidence, and no trading rules based on the swings. ZigZag turns also describe past price structure and do not by themselves establish predictive value; the scale’s practical behavior would need assessment on the intended instrument and timeframe.
Key ideas
- The ZigZag step size is derived from price movement instead of being specified as a fixed threshold.
- A single Scale input controls how readily the indicator marks a change in wave direction.
- Lower Scale settings are described as less sensitive, while higher settings create more reversals.
- The document gives no calculation details, performance evidence, or strategy rules for using the swings.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.