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 leg. It 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 be expressed in absolute dollars ($) in addition to percent (%)
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.