Delta ZigZag: Multi-Level Reversal Confirmation and Swing Thresholds
Summary
Delta ZigZag is a trend-reversal indicator that confirms a change in direction when price breaks through selected prior local highs or lows. Its number-of-levels setting controls how many extrema are considered; the description illustrates that an uptrend may remain in force until price breaks the lowest of the selected recent lows. The indicator also requires a minimum swing size, set either in pips or as a percentage, before drawing a reversal.
It can use high and low prices or closing prices, with distinct rules for continuing or reversing a swing when using intrabar extremes. The note says that a close-based version with one confirmation level has the same logic as a Kagi chart, though the visual format differs. It recommends no more than three confirmation levels, suggests aligning close-based signals with close-based execution, and says reversal levels can serve as trailing stops. These are operating suggestions; the document supplies no performance tests, and threshold choices affect signal timing.
Key ideas
- The indicator confirms trend changes when price breaks selected prior local extrema.
- A swing must exceed a user-set minimum measured in pips or percentage.
- Users can base its swings on high and low prices or on closing prices.
- With close prices and one level, the described logic matches a Kagi chart.
- The note suggests limiting confirmation levels and using reversal levels as possible trailing stops.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.