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Some of the questions about ZigZag validity show me that there are still
things that have to be made clear.
I will not repeat here everything I have already written in my previous
messages, except only a few.
Firstly I want to repeat: one should NOT try to use Zig and/or validity in
systems!
In a message of mine posted a couple of weeks ago, I had corrected a
previous mistake by saying that since validity watches zig every day, it is
also subject to revision when it reads 0 (zero). Why?
Because if today Zig changes direction but this direction is invalid, then
validity reads 0. If later zig is revised and thus it corrects its former
leg (if it is redrawn) then validity will evaluate this behavior again and
it will be revised too.
But then, you might ask, what is the purpose of using validity at all, if it
is to be redrawn like Zig does?
1. ZigZag validity may be only revised if its value was zero. It will NOT be
revised if it reads one, neither zig will be revised in this case. This
means that you can use validity ON THE LAST BAR to ensure that the last leg
of Zig will not be redrawn.
2. While Zigzag shows the truly important moves of prices that occurred IN
THE PAST, my indicator -on the contrary - shows what zig is doing NOW. This
means that all we know is if zig is valid TODAY. Neither do we know what
will happen tomorrow, nor do we know how many and which revisions have
occurred in the past.
The conclusions are the following:
The proper use of validity is to check how trusty is zig TODAY.
Past readings of validity are not accurate, meaning that when looking at the
chart not all of the validity's past indications are drawn. Actually ONLY A
FEW of them is there (that is why back tests of systems will not show the
truth).
Nevertheless, the LAST indication of validity (today's indication) is 100%
correct.
This in turn means that - at least in my opinion - the less useful element
of the expert I provided is Trends and the most useful is probably the
Alerts (to be precise, today's Alert)!
Then why did I write the whole expert?
Simply because some users asked for it!
I hope these explanations will help you understand better.
Spyros
Date: Mon, 4 Mar 2002 15:11:23 -0800
From: "Bijan Khezri" <bij3peat@xxxxxxx>
Subject: RE: ZigZag validity Expert
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Spyros,
I was trying to copy your expert and was stumbled at the highlighted parts,
which are not valid. Could you be kind enough to elucidate. Thanks.
Bijan
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