Interpreting a Moving-Average Crossover Zigzag Indicator
Summary
This document describes a static zigzag built from crossings between fast and slow moving averages. A bullish cross starts a green leg, while a bearish cross starts a red leg. The proposed interpretation treats a downward red leg as a buy signal in anticipation of a green leg, and an upward green leg as a sell signal before a red leg begins.
A backstep parameter is intended to validate the legs and reduce noise associated with moving averages. The document leaves the choice of moving-average periods to the user and calls the indicator experimental. It provides no chart examples, performance results, or rules for position sizing, exits, or risk control. The signal interpretation therefore remains a proposal to evaluate, rather than evidence of a profitable trading method.
Key ideas
- The indicator connects moving-average crossover points with alternating colored zigzag legs.
- A fast average crossing above a slow average begins a green leg.
- A fast average crossing below a slow average begins a red leg.
- The suggested interpretation treats downward red legs as buy signals and upward green legs as sell signals.
- A backstep is intended to validate legs and reduce noise, while the suitable settings are left open.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.