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As I remember it, the last time I heard from Spyros he wasn't using
anything to do with the zig zag, including the ZZ, etc.
Dirk, probabilities are the issue. When a peak or trough signal is
validated, all it means is that the price has changed direction enough
so that the direction change signal is stable. It says absolutely
nothing about the probability the stock will continue to rise or fall.
Once you use a validated zig zag signal, it stops the zig zag from
picking the bottom or top in hindsight. That means that from the point
of the turn to the validation signal, the price required to meet the
validation percentage is not part of the trade profit. That changes
the performance of the zig zag function dramatically. Test it and
you'll see.
You can use the validated zig zag signal like a filter as part of a
trading system, but it's not a great filter. At least that's been my
experience.
Spyros has a series of articles on the zig zag in Stocks and
Commodities. He spent a lot of years working on the zig zag.
--- In equismetastock@xxxxxxxxxxxxxxx, "dirk_boodts" <etrader@xxx> wrote:
>
> Thanks, this is very useful to find out if the latest turn is
> definite or not.
> The formula: cross(c,peak(1,c,5%) Should work because when the
> close is back up, it means that a trough is made and so the last
> peak is surely definite. (correct me if i'm wrong).
>
> The problem tough is that if the next close (bar) is not above the
> peak, then the expert advisor takes away the signal.... :-(
>
> Why is this? And is there something to do about it.
>
> rgds,
>
> Dirk
>
>
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, pumrysh <no_reply@> wrote:
> >
> > Spyros Raftopoulos did a good deal of work on this and has a
> > validating indicator. Check the files for ZZ indicators...3 files
> all
> > total.
> >
> > Preston
> >
> >
> >
> > --- In equismetastock@xxxxxxxxxxxxxxx, "dirk_boodts" <etrader@>
> > wrote:
> > >
> > > The Peak/trough indicator is very interesting but as you all
> know,
> > > one should avoid it when using in a system because it's
> hindsight.
> > >
> > > Although, I tought that Peak(1,C,5) must work (trustful) once
> the
> > > stock declined enough from that peak en rises again. With other
> > > words, once the trough(1,C,5) is made, then the Peak(1,C,5) can
> be
> > > used in a system, no..?
> > >
> > > I tried and yes indeed, once the close is back at the peak level
> it
> > > means that the stock made a low and the peak will not change
> > anymore.
> > > (am I correct?)
> > >
> > > THE PROBLEM tough is that in realtime after giving a signal -for
> > > example: C > Peak(1,C,5) - the next bar closes beyond the Peak
> > and
> > > the signal is gone. If the next bar is closer higher, the
> signal
> > > stays valid and we have a good signal.
> > >
> > > Any comments? How can we solve the problem that the signal
> doesn't
> > > dissapear the next bar?
> > >
> > >
> > > rgds
> > >
> >
>
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