Investor/RT Tour - Zig Zag Indicator

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Investor/RT Tour ( more on Technical Indicators )
Zig Zag Indicator

The Formula . . .	. . .more on Formulas
See Description Below

The Presentation . . .	. . . 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.

The Preferences . . .	. . . more on Preferences

Price - Price used as input for the calculations (Close, (High+ Low)/2, etc.) Minimum Price Change (%) - Percentage that the price must move in order to form a new "zig" or "zag". Draw Reference Lines At - This allows for the drawing of reference lines on each leg of the Zig Zag, at a user-specified % change level from the base of the leg. Label With - the ability to label each leg of the endline.

The Description . . .
The Zig Zag Indicator is a series of trendlines that connect significant tops and bottoms on a price chart. The Minimum Price Change parameter specifies the percentage that the price must move in order to form a new "zig" or "zag" line. The Zig Zag Indicator can be used to identify potential chart patterns and Elliot Wave formations. The "Minimum Price Change" setting of the Zig Zag and Zig Zag Oscillator indicators can now be expressed in absolute dollars ($) in addition to percent ( %).
Keyboard Adjustment . . .
The Zig Zag Minimum Percent Change value can be adjusted directly from the keyboard without having to open up the preferences window. Just select the indicator and then hit the up or down keys on your keyboard to adjust the value by 1. To adjust the value by a smaller increment of 0.1, hold down the shift key while pressing the up or down arrows on the keyboard. For more information on technical indicator adjustment, click here.
RTL Token . . . ( more )
The Investor/RT RTL language has access to the Zig Zag indicator using the token "ZIG". In the language, ZIG represents the % change level that the current Zig Zag leg has achieved. By qualifying the ZIG token, the user can access the % change level that was achieved by previous legs of the Zig Zag indicator. For instance, ZIG.1 would represent the % change level reached by the next to last leg, while ZIG.2 would represent the % change level reached by the leg prior to that. ZIG.1 and ZIG.2 could never have a smaller magnitude than the "minimum price change (%)" specified in the preferences, since these legs have already been validated to the percent change level. ZIG, however, may not yet have reached its required threshold. The following scan would test the current leg for validation on a 10 % change Zig Zag: ZIG >= 10 OR ZIG <= -10 The following scan will find those instruments that have just recently been validated: (ZIG > 10 AND ZIG < 10.5) OR (ZIG.1 > 10 AND ZIG.1 < 10.5 AND ZIG > 0.5) The first part of this scan, "ZIG > 10 AND ZIG < 10.5", finds any instruments whose current leg is between the 10 and 10.5% levels. The second part of the scan, ZIG.1 > 10 AND ZIG.1 < 10.5 AND ZIG > 0.5, finds instruments whose current leg is actually a very small negative value, but whose recently validated leg is between 10 and 10.5%.