The ZigZag indicator is a technical analysis tool used to identify price trends by filtering out smaller
price movements. It works by identifying significant highs and lows in a price series and drawing lines
between them. For a high or low to be considered significant, the price must reverse by at least a
specified percentage (deviation) from the last extreme point.
The indicator alternates between tracking highs and lows: after confirming a high, it searches for a
significant low, and after confirming a low, it searches for a significant high.
The Zig Zag indicator is considered to be a very lagging indicator because its values are plotted only
after each time period closes, and it only forms a permanent new line once the price has moved
significantly. Traders can use popular technical indicators like RSI, ADX, and the Stochastics oscillator
to confirm the price of a security is overbought or oversold when the ZigZag line changes direction.
ZigZag Indicator (ZigZag) Type: Trend
The ZigZag indicator is a technical analysis tool used to identify price trends by filtering out smaller price movements. It works by identifying significant highs and lows in a price series and drawing lines between them. For a high or low to be considered significant, the price must reverse by at least a specified percentage (deviation) from the last extreme point.
The indicator alternates between tracking highs and lows: after confirming a high, it searches for a significant low, and after confirming a low, it searches for a significant high.
The Zig Zag indicator is considered to be a very lagging indicator because its values are plotted only after each time period closes, and it only forms a permanent new line once the price has moved significantly. Traders can use popular technical indicators like RSI, ADX, and the Stochastics oscillator to confirm the price of a security is overbought or oversold when the ZigZag line changes direction.
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