ZigZag Percent Reversal
Sep 2, 2018
The ZigZag Percent Reversal indicator tracks price swings and identifies pivot points based on a specific percentage movement relative to the last significant high or low. It provides a clean, stepline visualization of price trends to help traders filter out minor price noise and focus on meaningful reversals.
Usage
The Usage section focuses on identifying trend shifts and key support/resistance levels. When the price reverses by more than the user-defined percentage, the indicator plots a new pivot point and shifts its direction.
- Trend Identification: A rising stepline indicates an uptrend, while a falling stepline indicates a downtrend.
- Reversal Points: The "ZZ Pivot" points highlight the exact price level where a reversal was confirmed.
- Break Points: The indicator displays a "Break Point" circle, representing the price level the market must cross to trigger a reversal in the opposite direction.
Traders can use these pivots to set stop-loss levels or to identify potential areas for trend-following entries.
Details
The script operates by maintaining a "track" of the highest high (during an uptrend) or the lowest low (during a downtrend). A reversal is triggered when the closing price moves away from that extreme by a distance greater than the lastPivot * percent.
Unlike standard ZigZags that may rely on fixed point distances, this version uses a percentage-based approach, making it adaptive across different asset classes and price scales. It is implemented using a stepline style for the main output to clearly delineate the "current" active pivot level until a new one is formed.
Settings
- Percent of last pivot price for zigzag reversal: Determines the percentage threshold required to trigger a trend reversal. Smaller values make the indicator more sensitive to price fluctuations, while larger values filter out more noise.
FAQ
How do I interpret the Break Point?
The Break Point is a visual guide showing the price level that needs to be reached for the ZigZag to change direction. It is calculated based on the current extreme and the percentage input.
Can I use this for automated alerts?
Yes, the script includes built-in alert conditions that trigger whenever the ZigZag switches direction (Reversal Up or Reversal Down).
How do I access this tool?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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