The ZigZag indicator is a technical analysis tool used in the ProBuilder language to identify significant price trends by filtering out minor fluctuations. This indicator simplifies price data by drawing lines directly connecting higher highs and lower lows that meet a specified percentage change or point difference. The primary purpose of the ZigZag indicator is to help in visualizing and analyzing clear trends and patterns, such as those found in Elliott Wave theory.

Syntax:

ZigZag[Zr](price)

Where Zr represents the percentage or the point change threshold that defines the minimum fluctuation to be considered a significant pivot, and price can be any price series like open, high, low, or close.

Example:

myZigZag = ZigZag[5](close)

This example sets up a ZigZag indicator with a 5% filter on the closing price of the security. Only price movements greater than 5% from the last pivot are considered, effectively filtering out smaller, less significant movements.

• The ZigZag indicator is particularly useful for identifying major price movements and can be a valuable tool for technical analysis in various market conditions.
• It does not predict future trends but rather clarifies past market movements.
• Adjusting the percentage or points parameter allows the user to control the sensitivity of the ZigZag indicator to market changes.

Understanding the ZigZag indicator’s output can aid in the analysis of price patterns and help in the identification of support and resistance levels, which are crucial for making informed trading decisions.