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--- technical_indicators:zigzag [2019/06/24 19:38]
127.0.0.1 external edit
+++ technical_indicators:zigzag [2022/06/15 23:46] (current)
betseyp [Using with SharpCharts]
@@ Line 20: / Line 20: @@
 ===== Elliott Wave Counts =====
-The ZigZag feature can be used to filter out small moves and make [[:market_analysis:introduction_to_elliott_wave_theory|Elliott Wave]] counts more straightforward. The chart below shows the S&P 500 ETF with a 6% ZigZag to filter moves less than 6%. After a little trial and error, 6% was deemed the threshold of importance. An advance or decline greater than 6% was deemed significant enough to warrant a wave for an Elliott count. Keep in mind that this is just an example. The threshold and the wave count are subjective and dependent on individual preferences. Based on the 6% ZigZag, a complete cycle was identified from March 2009 until July 2010. A complete cycle consists of 8 waves, 5 up and 3 down.
+The ZigZag feature can be used to filter out small moves and make Elliott Wave counts more straightforward. The chart below shows the S&P 500 ETF with a 6% ZigZag to filter moves less than 6%. After a little trial and error, 6% was deemed the threshold of importance. An advance or decline greater than 6% was deemed significant enough to warrant a wave for an Elliott count. Keep in mind that this is just an example. The threshold and the wave count are subjective and dependent on individual preferences. Based on the 6% ZigZag, a complete cycle was identified from March 2009 until July 2010. A complete cycle consists of 8 waves, 5 up and 3 down.
 {{:technical_indicators:zigzag:zigz-4-spyelliott.png|ZigZag - Chart 4}}
+**Learn More:** [[:market_analysis:introduction_to_elliott_wave_theory|Elliott Wave Theory]]
 ===== Retracements and Projections =====
@@ Line 30: / Line 31: @@
 {{:technical_indicators:zigzag:zigz-3-altrrretrace.png|ZigZag - Chart 3}}
-As you may have guessed, seeing these lines as a percentage of the prior lines makes it possible to assess Fibonacci projections. The August decline (Line 2) retraced around 61.8% of the June-July advance (Line 1). This is a classic Fibonacci retracement. The advance from early September to early November was 1.646 times the August decline. In this sense, the ZigZag (Retrace.) can be used to project the length of an advance. Again, 1.646 is close to the Fibonacci 1.618, which is the Golden Ratio used in many projection estimates. See our ChartSchool article for more on [[:chart_analysis:fibonacci_retracemen|Fibonacci retracements.]]
+As you may have guessed, seeing these lines as a percentage of the prior lines makes it possible to assess Fibonacci projections. The August decline (Line 2) retraced around 61.8% of the June-July advance (Line 1). This is a classic Fibonacci retracement. The advance from early September to early November was 1.646 times the August decline. In this sense, the ZigZag (Retrace.) can be used to project the length of an advance. Again, 1.646 is close to the Fibonacci 1.618, which is the Golden Ratio used in many projection estimates.
+**Learn More:** [[:chart_analysis:fibonacci_retracemen|Fibonacci Retracements]]
 ===== Conclusion =====
-The ZigZag and ZigZag (Retrace.) filter price action and do not have any predictive power. The ZigZag lines simply react when prices move a certain percentage. Chartists can apply an array of [[:chart_analysis|technical analysis tools]] to the ZigZag. Chartists can perform basic trend analysis by comparing reaction highs and lows. Chartists can also overlay the ZigZag feature to look for price patterns that might not be as visible on a normal bar or line chart. The ZigZag has a way of highlighting the important movements and ignoring the noise. When using the ZigZag feature, don't forget to measure the last line to determine if it is temporary or permanent. This line is temporary if the current price change is less than the ZigZag parameter, but becomes permanent if the price change is greater than or equal to the ZigZag parameter.
+The ZigZag and ZigZag (Retrace.) filter price action and do not have any predictive power. The ZigZag lines simply react when prices move a certain percentage. Chartists can apply an array of technical analysis tools to the ZigZag. Chartists can perform basic trend analysis by comparing reaction highs and lows. Chartists can also overlay the ZigZag feature to look for price patterns that might not be as visible on a normal bar or line chart. The ZigZag has a way of highlighting the important movements and ignoring the noise. When using the ZigZag feature, don't forget to measure the last line to determine if it is temporary or permanent. This line is temporary if the current price change is less than the ZigZag parameter, but becomes permanent if the price change is greater than or equal to the ZigZag parameter.
 ===== Using with SharpCharts =====
@@ Line 46: / Line 49: @@
 {{:technical_indicators:zigzag:zigz-7-shch2.png|ZigZag - SharpCharts}}
+For more details on the parameters used to configure ZigZag overlays, please see our [[https://support.stockcharts.com/doku.php?id=sharpcharts:reference#zigzag|SharpCharts Parameter Reference]] in the Support Center.
+===== Additional Resources =====
+==== ChartSchool Articles ====
+**[[:trading_strategies:swing_charting|Swing Charting]]**\\
+Learn how to use the ZigZag overlay when swing trading.
+==== Recommended Books ====
-===== Further Study =====
+Robert Prechter's //Elliott Wave Principle// introduces the fundamental concepts and techniques of Elliott Wave Theory and serves as a comprehensive yet accessible handbook for traders interested in this market forecasting technique.
 |  **Elliott Wave Principle**\\ Robert Prechter  |
 |  [[https://store.stockcharts.com/products/elliott-wave-principle-key-to-market-behavior|{{::technical_indicators:zigzag:store_prechter_elliottwaveprinciple.gif|}}]]  |
 |   [[https://store.stockcharts.com/products/elliott-wave-principle-key-to-market-behavior|{{:store:buynowbuttone.jpg|Buy Now}}]]  |