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ZigZag
Use the ZigZag indicator in Quantower to filter out minor moves and highlight significant swings, trends, and chart patterns
Description
ZigZag is a trend-following indicator that allows to determing trend swings. A combination of ZigZag highs and lows can be used as a support or resistance level. Also, it helps to identify significant changes in price and filter out short-term fluctuations.
Formula
ZigZag finds extremums in price movement. These extremums reflect the diviations of price that are more than setted value. By default, the value for a ZigZag is 5%, it will ensure that only price fluctuations of 5% or more will be shown in the chart.
Most useful cases
Determining swings - the most common case of ZigZag usage is eliminating small price fluctuations and paying attention to huge price swings.
Support/Resistant levels - ZigZag is also very helpful in finding levels of support and resistance; to do it, traders generally analyse the price of ZigZag swing and combine the closest swings together in one price level.
