Stock Portfolio Organizer
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#1 Selling Amibroker Plugin featuring:
Zig-Zag Indicator with Buy/Sell Points for Amibroker (AFL)
Interpreting the Zig-Zag Indicator
The Zig-Zag indicator is extremely useful for determining price trends, support and resistance areas, and classic chart patterns like head and shoulders, double bottoms and double tops. The Zig-Zag indicators uses both swing highs and swing lows in its calculation:
Swing Highs: When a price (usually close) is both higher than the price previous to it and after it.
Swing Lows: When a price is both lower than the price prior to it and lower than the price following it.
The Zig-Zag indicator can use both percentages or points in its construction. To construct the Zig-Zag indicator, there must be a certain percentage or number of points between a swing high and a swing low before a line will be drawn. The chart below of the E-mini Nasdaq 100 Futures contract visually illustrates the difference between a price retracement Zig-Zag of 3% and a price retracement Zig-Zag of 5%:
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Indicator / Formula
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