. . .more on Formulas 

.......where BASE is the price of the base (start) of the current leg of the Zig Zag indicator.

. . . more on Charts 

Above is a Daily Bar Chart of Real Networks (RNWK) .  The Zig Zag indicator overlays the bars, drawn as successive black trendlines using the preferences seen below. 

. . . more on Preferences 

• Price - Price used as input for the calculations (Close, (High+ Low)/2, etc.)

• Use High / Low - When this option is checked, the high and low extremes will be used to compute the Zig Zag legs.

• Minimum Price Change (%) - Percentage that the price must move in order to form a new "zig" or "zag".

• Draw Type, Color, and Style - The user has control over whether the result is drawn as a histogram or line, and over the color(s).

• Draw Reference Line At X % - An optional reference line may be drawn at any % level.  If 10% is selected, for instance, then two reference lines will be drawn, one at 10% and one at -10%.

The Zig Zag Oscillator indicator provides a way of viewing the Zig Zag Indicator information in a different form, oscillating about 0. The indicator represents the percent change at each bar of the current price from the base price of the current Zig Zag leg. When the Zig Zag is currently in an uptrend state, the Zig Zag Oscillator will be above 0. Similarly, when the Zig Zag is in a downtrend state, the oscillator will be below 0. Optionally, reference lines may be drawn at any percent change level. If a reference line value of 10% is specified, reference lines will be drawn at both 10% and -10%. It is common to draw the reference lines at the same level as the minimum percent change level, in order to clearly see when prices have reached the minimum required level.

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A "Results" option has been added to the Zig Zag Oscillator indicator. This option will default to "Zig Zag Percent Change" which is the result that Zig Zag Oscillator has given in prior releases of Investor/RT. Four new choices provide access to a variety of data elements regarding the Zig Zag Oscillator. Each result option is discussed below:

Zig Zag Percent Change This result represents the percent change of the current price (close) from the previous pivot price.

Retracement Level This result represents the retracement level of current price in respect to the last leg of the Zig Zag.

Pivot Price This result represents the price of the last Zig Zag pivot point.

Previous Pivot Price This result represents the price of the next to last Zig Zag pivot point.

Direction This result represents the direction of the current Zig Zag leg. A value of 1 represents the current leg is upward trending, while a value of 0 represents that the current leg is downward trending.

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Zig Zag Line Price
The Zig Zag oscillator indicator has a new result option titled "Zig Zag Line Price", that may be useful in RTL formulas For any bar you can now easily compare the current price to the value of the current zig zag leg at that bar.
 

For more information on technical indicator adjustment, click here.