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Just my tuppence worth on Spyros's validated ZigZag........
I use it in two ways in my (FX) trading strategy. Firstly, it is a very
good trend indicator. As long as the indicator value is +1, the uptrend is
intact. An indicator value of -1 means that a downtrend is in place. You
can adjust the percentage/point tolerances in the same way as you can with
the MS ZigZag indicator.
More useful for me however, is using it as an objective indication of when
and where to scale into the trade, which I do all the time. If working a
long trade and the Validated ZigZag changes from +1 to -1, it indicates
that a pullback is occurring. When it changes back to +1, ideally when the
price hits a Fib level or a pivot level, then I will add to the trade and
move my stop up to just below the validated trough.
Hope it helps.
Regards,
Kevin
At 17:09 12/11/2007 +0000, you wrote:
>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
><mailto:equismetastock%40yahoogroups.com>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
> <mailto:equismetastock%40yahoogroups.com>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
> <mailto:equismetastock%40yahoogroups.com>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
> > > >
> > >
> >
>
>
[Non-text portions of this message have been removed]
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