It is possible to use zigzag in a backtest. the important thing is
that the signals can only occur after the price has passed the
reversal level
eg here is a way to use it
p = Peak(C,10);
pb = PeakBars(C,10) ;
t = Trough(C,10) ;
tb = TroughBars(C, 10);
cp = Cross(p*0.9, LowestSince( pb==0, C ));
ct = Cross(HighestSince( tb==0, C ), t*1.1);
Fall = Flip(Cp,Ct);
Rise = Flip(Ct,Cp);
Buy = Cross(MACD() ,Signal() ) AND rise;
Sell = Cross(Signal( ),MACD()) ;
SetChartOptions( 0, chartShowDates| chartWrapTitle );
GraphXSpace= 10;
_N(Title = "{{NAME}} - {{INTERVAL}} {{DATE}} "+_DEFAULT_NAME( )+" :
{{OHLCX}} {{VALUES}}" );
BarColor = IIf( rise, colorPaleGreen, IIf( fall, colorOrange,
ParamColor( "Price Colour", colorWhite )));
Plot( C, "", BarColor, ParamStyle( "Price Style", styleBar, maskPrice ) );
Plot( Zig(C,10), "Zig", colorRed, styleLine );
Plot(
IIf(pb<tb,Peak( C,10)*0.9, Trough(C, 10)*1.1), "Zig",
IIf(pb<tb,colorOran ge,colorPaleGree n), styleStaircase );
PlotShapes( shapeSmallUpTriangl e*Ct, colorPaleGreen, 0, L, -12 );
PlotShapes( shapeSmallDownTrian gle*Cp, colorOrange, 0, H, -12 );
PlotShapes( shapeUpArrow* Buy, colorGreen, 0, L, -24 );
PlotShapes( shapeDownArrow* Sell, colorRed, 0, H, -24 );
--
Cheers
Graham Kav
AFL Writing Service
http://www.aflwriti ng.com
2008/5/21 Louis Préfontaine <rockprog80@xxxxxx com>:
> Hi,
>
> My idea is to use the zigzag feature in the past to find the best stocks
> which match ETF. I'd like to use the zigzag directly in my formula without
> having to re-build a new watch-list
often.
>
> Louis
>
> 2008/5/21 Ed Hoopes <reefbreak_sd@ yahoo.com>:
>>
>> ZigZag
>> This indicator cannot be used for trading. It effectively looks into
>> the future. Say you set its threshold at 4%. It will show tops and
>> bottoms that are 4% or greater difference. If you get a high today,
>> but a higher hi 2 weeks from now, it will move the reversal to the new
>> higher high.
>>
>> It is most often used to calculate theoretical performance of a series
>> of price movements. Then you can run your indicators over the same
>> period and calculate a "capture ratio".. Good for comparing indicators
>> - not trading.