Zig Zag

Anyone using the zig zag indicator to quantify trend persistance...in a derivative...

http://www.linnsoft.com/tour/techind/zigzag.htm

some derivatives are more trendy then others... why waste time in 'noisy' derivatives.....

 

I use it regularly, it helps accentuate price action.

Anek

 

I use ZigZagFibs Indicator as an important tool to detect the price retracement levels
within each swing, detect certain patterns like 'M' tops, 'W' bottoms... They also help
determine each swing strength, filter out noise in trends and validate certain
patterns using Minimum Swing Length, Swing Bars, Swing Time etc...

ZigZag Indicator with Fib. Retracements is a very popular indicator in
TradeStation users. Here is the link for ZigZagFibs V2 Indicator I posted
on TS Forums....

https://www.tradestation.com/Discussions/Topic.aspx?Result=1&Topic_ID=44952

I also think ZigZag pattern itself has 'NO' predictive power of swings...
They demonstrate relative price movements, elapsed time to help other
patterns or wave-counts etc. There are some theories of how 'Symmetric
Waves' are formed and traded in charts... (Check J.D. Hamon or
Michael Gur's Books)

Another key in plotting ZigZag formations is the 'Fib Clusters' within the
last N swings to determine potential Support and Resistance areas. These
price levels can be detected using Fibonacci price clustering methods,
where each price level is grouped with other price-points within a
certain threshold. These cluster levels act as attractive support/resistance
points for trading.


Regards,
Suri

 

ZigZag patterns with Fib. Clusters Example

Regards,
Suri

 

I'm mainly looking at quantifying average duration of linearity in a certain derivative, relative to the timeframe traded.

 

heres the oil market..with a finer resolution...

 

heres the same market with less resolution...

notice the number of lines created is less and obivously a function of user input, but the actual number of lines is also dependent on the nature of the market.

quantification can be made on the:

1)slope
2)direction
3)length

of any market. Thus if the number of lines produced is 10, but 7 point up and length is greater on the ones pointing up, then the probability of the market can be quantified.

 

Jan Arps has a nice free tool: Universal Swing Tool(UST), but for Tradestation & eSignal only

 

Crap I don't think I adapted the script properly. lol I don't use TS or have access to their forums so I had to guess.