|
PureBytes Links
Trading Reference Links
|
NorCalTrader:
Since you now have Zigzag Trend (ZZT), I see no reason for your choice of
Zigzag Validity. ZZT could be considered as kind of Validity update, but
actually it's more than that.
Validity just shows if zig is currently valid or not.
It doesn't indicate the direction of the trend, it needs the presence of
zig, its zero readings of the past are doubtful and it can't be back tested.
To help you better understand the differences between the 3 indicators
(Zigzag, Zigzag Validity and Zigzag Trend) I will give you a comparative
table, which will be included in a new article about Zigzag Trend.
Zigzag Zigzag Validity Zigzag Trend
Values returned multiple 1 = valid trend 1 = valid uptrend
0 = invalid trend -1= valid downtrend
Indication Yes No Yes
about direction
Validity of Doubtful Valid Valid
current indication
Validity of Valid Doubtful Valid
past indications
Suitability for Not suitable Not suitable Suitable
back tests
Number of valid All except the Only the last 2 All
reversal points last two (indirectly (indirectly
(visible) accessible) accessible)
Lag No No Until confirmation
As you can see Zigzag Trend is an always valid and tradable indicator.
The only cost you pay is its lag. But this lag is what protects you against
a false reversal. I am not sure I have understood your trading approach.
For example zigzag validity will drop to 0 each time prices drop below the
most recent highest peak. If you close your long position there, maybe you
are
doing so in the middle or even the start of a big uptrend.
Will you re-enter when validity rises again?
If no, then you are loosing the rally. If yes, then
what you do is following zigzag itself with all its redraws. You don't need
validity or any other tool for that.
Maybe I didn't understand well. I might be able to help further if I had
a clearer picture of what you are asking for.
What I am sure of is that no matter what your approach is, you can follow it
also using ZZT and in most cases more efficiently. In other words, there is
nothing that Validity can do that ZZT cannot do. Even if you are looking
for invalid last legs, then just compare zig with ZZT: if for example zig
just
turned up but ZZT still reads -1 then zig is invalid. In this case you would
normally preserve your short position, unless further analysis prompts you
to exit or reverse.
Spyros
-----------------------------------------------
Message: 10
Date: Mon, 24 Feb 2003 10:48:18 -0800
From: "nct" <nct@xxxxxxxxx>
Subject: ZigZag Validity SR (Spyros)... looking for updates
I'm still using a variation of ZigZag SR, trading QQQ 15 min chart with 3%
setting to good effect. At times I have taken the scalping approach of
exiting trades upon the first ZigZag validity "zero" signal, even though it
might reconfirm as valid later. (For example, I closed a long trade in the
QQQ at 2:45 on Fri 2/21, while ZigZagSR is theoretically still long until
QQQ hits 24.55 for a short.)
In choppy range bound markets, this has kept my account above break-even
despite the fact that zigzag is a trending type market system. The
challenge is, of course, deciding whether to re-enter the trade if validity
reconfirms valid in the same direction... All of which gets very intuitive,
and makes me wonder if there has been any further design work on this
system, which would get one in and out of valid micro trends in range-bound
markets without suffering the stops and reversals that can wipe you out with
a trending system in a market like this one.
Is there anyone else still hung up on zigzag based systems or other simple
percentage-reversal type trading? I'd be happy to share some code with
those wondering about this (if you missed previous threads), and would
welcome any updates on what Spyros did with his zigzag validity work, if
anything further.
NorCalTrader
P.S. thanks to the group for the Greek lessons!
________________________________________________________________________
To unsubscribe from this group, send an email to:
Metastockusers-unsubscribe@xxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|