# Price Simplification Price Simplification redraws price as a handful of straight segments using the Ramer-Douglas-Peucker algorithm, keeping only the pivots that matter at an ATR-scaled tolerance. The result is market structure without the noise (dominant slope, true swing points, clean geometry) plus an optional dashed extension projecting the last segment's momentum. - Indicator in the LuxAlgo Library, by LuxAlgo, published Feb 14, 2026. - Access: free. - Concepts: [Zigzag Structure](https://www.luxalgo.com/library/concept/zigzag-structure/) (primary), [Swing High/low](https://www.luxalgo.com/library/concept/swing-high-low/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwn4t4m006pvhsgq8nu53as - Page: https://www.luxalgo.com/library/indicator/price-simplification/ **Price Simplification** runs the Ramer-Douglas-Peucker (RDP) algorithm, a curve-simplification method borrowed from cartography, across a window of price data, keeping only structurally significant points and connecting them into a clean [zigzag skeleton](https://www.luxalgo.com/library/concept/zigzag-structure/) of the market. Significance is measured against an ATR-scaled threshold, so what counts as meaningful adapts automatically to each market's volatility. ## How to Trade the Price Simplification? - **Segment slope**: the dominant trend at a glance (rising segments in uptrends, falling in downtrends, alternation in ranges). - **Structural pivots**: the retained points mark genuine higher highs and lower lows, clarifying support, resistance, and consolidation geometry without candle noise. - **Sensitivity as style**: a lower ATR Multiplier catches smaller swings for short-term work; a higher one keeps only major turns for position trading and macro trend analysis. - **Extended last segment**: an optional dashed projection of the final segment's slope, a structural momentum compass for judging whether price still agrees with the prevailing move, not a prediction. Because it isolates pure geometry, the tool slots equally into discretionary structure trading and systematic frameworks: market structure breaks, order block analysis, breakout setups, trend-following. ## Price Simplification Settings - **Window Size**: the span of bars fed to the algorithm. Go larger for big-picture structure, smaller for near-term detail. - **ATR Multiplier**: simplification sensitivity; higher values mean fewer segments and stronger filtering. - **ATR Length**: the volatility measurement behind the adaptive threshold. - **Extend Last Segment**: toggles the dashed projection, which picks up one bar beyond the last kept point and extends its slope forward. - **Line Color / Line Width**: appearance controls. ## Frequently Asked Questions ### Does Price Simplification repaint? Yes, by design: the calculation runs on a rolling historical window, so segments display retrospectively and can adjust as new bars form and the window shifts. Use it as a structural map rather than a signal printer. ### How is it different from a classic ZigZag? A classic [ZigZag](https://www.luxalgo.com/library/indicator/zigzag/) flips direction whenever price retraces by a set threshold. RDP instead asks which points matter to the overall shape, recursively measuring perpendicular distance across the window, a volatility-aware answer to the same question. ### How can I try it? Free on the LuxAlgo Library, and from this page you can run it inside Quant, our coding agent, to see how different window and multiplier combinations reshape the structure. ## Related indicators - [Delta ZigZag](https://www.luxalgo.com/library/indicator/delta-zigzag/) (Zigzag Structure): markdown at https://www.luxalgo.com/library/indicator/delta-zigzag.md - [Elliott Wave](https://www.luxalgo.com/library/indicator/elliott-wave/) (Zigzag Structure): markdown at https://www.luxalgo.com/library/indicator/elliott-wave.md - [Wave Consolidation](https://www.luxalgo.com/library/indicator/wave-consolidation/) (Zigzag Structure): markdown at https://www.luxalgo.com/library/indicator/wave-consolidation.md - [Donchian Zig-Zag](https://www.luxalgo.com/library/indicator/donchian-zig-zag/) (Zigzag Structure): markdown at https://www.luxalgo.com/library/indicator/donchian-zig-zag.md - [Zig Zag Channels](https://www.luxalgo.com/library/indicator/zig-zag-channels/) (Zigzag Structure): markdown at https://www.luxalgo.com/library/indicator/zig-zag-channels.md - [Structural Leg Profiler](https://www.luxalgo.com/library/indicator/structural-leg-profiler/) (Zigzag Structure): markdown at https://www.luxalgo.com/library/indicator/structural-leg-profiler.md - [Swing Highs/Lows & Candle Patterns](https://www.luxalgo.com/library/indicator/swing-highs-lows-candle-patterns/) (Swing High/low): markdown at https://www.luxalgo.com/library/indicator/swing-highs-lows-candle-patterns.md - [Unreached Highs/Lows Oscillator](https://www.luxalgo.com/library/indicator/unreached-highs-lows-oscillator/) (Swing High/low): markdown at https://www.luxalgo.com/library/indicator/unreached-highs-lows-oscillator.md --- Source: https://www.luxalgo.com/library/indicator/price-simplification/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/