Recursive Zigzag ABC Patterns with Fibonacci Entry and Exit Levels

Summary

This indicator scans recursively calculated zigzag pivots for three-point ABC patterns and plots their legs, ratio, and projected entry, stop, and target areas. Users can choose whether levels derive from an ABC extension or a BC retracement, adjust the ratios, and optionally calculate on a logarithmic scale. Pattern filters can require pivots to align with a trend, oppose it, contract, or expand; settings also control whether close prices track entry, target, stop, and retest events.

The script tracks bullish and bearish patterns through invalidation, stop, and completion states, then displays counts, win ratios, and a risk-reward figure. These are indicator-level pattern outcomes, not evidence of executable strategy performance: the document supplies no market-specific backtest, transaction costs, or validation procedure. Zigzag pivots are sensitive to their length and depth settings, so patterns and apparent outcomes depend on configuration and should be tested for stability before use.

Key ideas

• Recursive zigzag pivots provide the turning points used to scan for ABC structures.
• Entry, stop, and target levels can be projected from either an ABC extension or a BC retracement.
• Pivot-shape filters can select patterns aligned with, opposed to, or independent of the prevailing trend.
• The indicator classifies patterns as invalid, stopped, or completed and summarizes their observed outcomes.
• Displayed pattern statistics do not establish live strategy profitability or account for trading costs.

Tags

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