Zigzag (1-2-3 Pattern identifier)

byexample

I would like to replicate the 1-2-3 pattern trading process using the Zigzag overlay. Using End of Day results, is it possible to get stockcharts to list the stocks that are changing direction for the line on the zigzag? Is there something in Stockcharts that currently identifies stocks that are meeting the 1-2-3 pattern?

lmkwin

I don't think that the changing of direction on the Zigzag often is confirmed at the point that it shows on the chart. The price needs to plot a new high ( off the zag point) greater than or equal to the Zigzag percentage to confirm the zig. And vice versa for the reversal off the zig plot.

It would be nice if stockcharts plotted an unconfirmed leg in a different color or something, but it doesn't. The changing of direction is just an indication of a price movement off the high or low of the period, so maybe use a % move off the upper or lower price channel at whatever percentage you would like?

and [close <= yesterday's Upper Price Chan(20) * 0.97]
and [close >= yesterday's Upper Price Chan(20) * 0.94]

would show a close that pulled off the 20 period high between 3 to 6%.

As you may know, the Zigzag indicator sets its own reversal percentage value based on the chart history, unless you specify one in the parameters. So some securities may have a default Zigzag value of 15 and others may have 5 as the default.

In the scanning, Zigzag is one of the "Indicators not supported" listing. A few useful indicators on the list that unfortunately you can't really use to their fullest in scans. You have to think your way around it to figure out what you are really looking for and then working from there. Hope this helps? I use the Zigzag on all my time based charts.

byexample

First, I greatly appreciate the insight. I was using the zigzag and observing the new leg (change in direction) and I did refine the default to match my needs. I understand that it is not a price change confirmation. I want to have the system identify the stocks with the initial change and I would save that as a watchlist to confirm change within a day or two. You listed couple of items that I had not previously thought about. Very useful.

lmkwin

Although they still have Price Relative in the "Indicators not supported" listing, my observation is that you CAN use the Price Relative in the scan workbench.

I have used it in scans and alerts using the Min/Max, and it appears to produce correct results.

and [[Price Relative(SPY) >= yesterdays Daily MAX(25,Price Relative(SPY))]
or [Price Relative(SPY) >= yesterdays Daily MAX(65,Price Relative(SPY))]
or [Price Relative(SPY) >= yesterdays Daily MAX(100,Price Relative(SPY))]
or [Price Relative(SPY) >= yesterdays Daily MAX(145,Price Relative(SPY))]]

will give you securities that are increasing their Price Relative to SPY above their prior Price Relative High for various periods.

You can also using it for moving average crosses or just is the Price Relative greater or less than the moving average.

They haven't created the opportunity to use $Industry or $Sector in the Price Relative yet, so you are "stuck" with using the PctRelative for that one. The PctRelative doesn't really work correctly with Min/Max or moving averages though.

https://support.stockcharts.com/doku.php?id=scans:functions