Fibonacci Trading Backtest

• 11/20/2022 at 8:37 PM #204531
  Trimicha

  Dear Team,

  can someone please write me a trading program, so I can backtest that?

  it’s related, somehow, to the zigzag indicator. The scenario is as follows:

  a swing is retraced min 50%, max 85% and at least with 2 bars..

  entry is  after a close below 38.2% retracement of that same fib ret.

  stop-loss is after a close above 50% or 3 bars sideways action. profit taking is at 127.2 and 138.2% projection of that first swing and its retracement.

   

  I have no idea how I could do it and if the procedure asking for these things is completely different, excuse me please. any help is greatly appreciated.

   

  Thank you,

  Michael

   

  

  Trimicha

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  11/20/2022 at 8:42 PM #204536
  robertogozzi

  • Only post in the language of the forumthat you are posting in. For example English only in the English speaking forums and French only in the French speaking forums.
  • Do not double post. Ask your question only once and only in one forum. All double posts will be deleted anyway so posting the same question multiple times will just be wasting your own time and will not get you an answer any quicker. Double posting just creates confusion in the forums.

  I deleted your post wiritten in English in the German forum.

  Thank you 🙂

   

  

  robertogozzi

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  11/20/2022 at 8:44 PM #204537
  Trimicha

  Yeah, thank you. I am quite new here. You are fast. Is the request in general okay?

  

  Trimicha

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  11/23/2022 at 6:11 PM #204691
  robertogozzi

  There you go (I tested it on DAX, Daily TF):

  // my FIBO system // // https://www.prorealcode.com/topic/fibonacci-trading-backtest/ // DEFPARAM CumulateOrders = False DEFPARAM PreLoadBars = 0 ONCE p = 20 ONCE UPflag = 0 ONCE DNflag = 0 IF Not onMarket THEN HH = highest[p](high) LL = lowest[p](low) Diff = HH - LL IF Diff <> Diff[1] THEN UPflag = 0 DNflag = 0 ENDIF Fib0236 = Diff * 0.236 Fib0382 = Diff * 0.382 Fib0500 = Diff * 0.500 Fib0618 = Diff * 0.618 Fib0764 = Diff * 0.764 Fib0850 = Diff * 0.850 Fib1272 = Diff * 1.272 Fib1382 = Diff * 1.382 UP = 0 DN = 0 FOR i = 0 TO (p - 1) IF high[i] = HH THEN UP = 1 LastBar = BarIndex[i] BREAK ENDIF IF low[i] = LL THEN DN = 1 LastBar = BarIndex[i] BREAK ENDIF NEXT BarsAfterFIBO = max(1,BarIndex - LastBar) IF UP THEN Fib0230 = HH - Fib0230 Fib0382 = HH - Fib0382 Fib0500 = HH - Fib0500 Fib0618 = HH - Fib0618 Fib0764 = HH - Fib0764 Fib0850 = HH - Fib0850 Fib1272 = LL + Fib1272 Fib1382 = LL + Fib1382 LastHH = lowest[BarsAfterFIBO](min(open,close)) IF LastHH < Fib0850 THEN UPflag = -1 ENDIF ELSIF DN THEN Fib0236 = LL + Fib0236 Fib0236 = LL + Fib0236 Fib0500 = LL + Fib0500 Fib0618 = LL + Fib0618 Fib0764 = LL + Fib0764 Fib0850 = LL + Fib0850 Fib1272 = HH - Fib1272 Fib1382 = HH - Fib1382 LastLL = highest[BarsAfterFIBO](max(open,close)) IF LastHH > Fib0850 THEN DNflag = -1 ENDIF ENDIF IF UP AND (UPflag = 0) THEN IF (close < Fib0500) AND (BarsAfterFIBO >= 2) THEN UPflag = 1 ENDIF ELSIF DN AND (DNflag = 0) THEN IF (close > Fib0500) AND (BarsAfterFIBO >= 2) THEN DNflag = 1 ENDIF ENDIF ELSE UPflag = 0 DNflag = 0 UP = 0 DN = 0 ENDIF IF UP AND (UPflag = 1) AND (close >= Fib0382) AND Not OnMarket THEN BUY 2 Contract at Market SELL AT Fib0500 STOP //SL SELL AT Fib1382 LIMIT //TP ENDIF IF DN AND (DNflag = 1) AND (close <= Fib0382) AND Not OnMarket THEN SELLSHORT 2 Contract at Market EXITSHORT AT Fib0500 STOP //SL EXITSHORT AT Fib1382 LIMIT //TP ENDIF IF LongOnMarket THEN SELL AT Fib0500 STOP //SL SELL AT Fib1382 LIMIT //TP IF close >= Fib1272 THEN SELL 1 Contract at Market //exit 50% ENDIF ELSIF ShortOnMarket THEN EXITSHORT AT Fib0500 STOP //SL EXITSHORT AT Fib1382 LIMIT //TP IF close <= Fib1272 THEN EXITSHORT 1 Contract at Market //exit 50% ENDIF ENDIF graphonprice Fib1272 coloured("Red") AS "TP 1" graphonprice Fib1382 coloured("Blue") AS "TP 2" //graph UP //graph DN //graph Diff <> Diff[1] //graph UPflag //graph DNflag //graph LastBar //graph BarsAfterFIBO

  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114

  // my FIBO system // // https://www.prorealcode.com/topic/fibonacci-trading-backtest/ // DEFPARAM CumulateOrders = False DEFPARAM PreLoadBars    = 0 ONCE p      = 20 ONCE UPflag = 0 ONCE DNflag = 0 IF Not onMarket THEN    HH          = highest[p](high)    LL          = lowest[p](low)    Diff        = HH - LL    IF Diff <> Diff[1] THEN       UPflag = 0       DNflag = 0    ENDIF    Fib0236 = Diff * 0.236    Fib0382 = Diff * 0.382    Fib0500 = Diff * 0.500    Fib0618 = Diff * 0.618    Fib0764 = Diff * 0.764    Fib0850 = Diff * 0.850    Fib1272 = Diff * 1.272    Fib1382 = Diff * 1.382    UP      = 0    DN      = 0    FOR i = 0 TO (p - 1)       IF high[i] = HH THEN          UP = 1          LastBar = BarIndex[i]          BREAK       ENDIF       IF low[i] = LL THEN          DN = 1          LastBar = BarIndex[i]          BREAK       ENDIF    NEXT    BarsAfterFIBO = max(1,BarIndex - LastBar)    IF UP THEN       Fib0230 = HH - Fib0230       Fib0382 = HH - Fib0382       Fib0500 = HH - Fib0500       Fib0618 = HH - Fib0618       Fib0764 = HH - Fib0764       Fib0850 = HH - Fib0850       Fib1272 = LL + Fib1272       Fib1382 = LL + Fib1382       LastHH  = lowest[BarsAfterFIBO](min(open,close))       IF LastHH < Fib0850 THEN          UPflag = -1       ENDIF    ELSIF DN THEN       Fib0236 = LL + Fib0236       Fib0236 = LL + Fib0236       Fib0500 = LL + Fib0500       Fib0618 = LL + Fib0618       Fib0764 = LL + Fib0764       Fib0850 = LL + Fib0850       Fib1272 = HH - Fib1272       Fib1382 = HH - Fib1382       LastLL  = highest[BarsAfterFIBO](max(open,close))       IF LastHH > Fib0850 THEN          DNflag = -1       ENDIF    ENDIF    IF UP AND (UPflag = 0) THEN       IF (close < Fib0500) AND (BarsAfterFIBO >= 2) THEN          UPflag = 1       ENDIF    ELSIF DN AND (DNflag = 0) THEN       IF (close > Fib0500) AND (BarsAfterFIBO >= 2) THEN          DNflag = 1       ENDIF    ENDIF ELSE    UPflag = 0    DNflag = 0    UP     = 0    DN     = 0 ENDIF IF UP AND (UPflag = 1) AND (close >= Fib0382) AND Not OnMarket THEN    BUY 2 Contract at Market    SELL AT Fib0500 STOP         //SL    SELL AT Fib1382 LIMIT        //TP ENDIF IF DN AND (DNflag = 1) AND (close <= Fib0382) AND Not OnMarket THEN    SELLSHORT 2 Contract at Market    EXITSHORT AT Fib0500 STOP    //SL    EXITSHORT AT Fib1382 LIMIT   //TP ENDIF IF LongOnMarket THEN    SELL AT Fib0500 STOP         //SL    SELL AT Fib1382 LIMIT        //TP    IF close >= Fib1272 THEN       SELL 1 Contract at Market       //exit 50%    ENDIF ELSIF ShortOnMarket THEN    EXITSHORT AT Fib0500 STOP    //SL    EXITSHORT AT Fib1382 LIMIT   //TP    IF close <= Fib1272 THEN       EXITSHORT 1 Contract at Market //exit 50%    ENDIF ENDIF graphonprice Fib1272 coloured("Red")  AS "TP 1" graphonprice Fib1382 coloured("Blue") AS "TP 2" //graph UP //graph DN //graph Diff <> Diff[1] //graph UPflag //graph DNflag //graph LastBar //graph BarsAfterFIBO

  I only have to add the SIDWEWAYS exit. Can you explain what you mean exactly by sideways?

   

  

  robertogozzi

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  11/23/2022 at 6:16 PM #204693
  robertogozzi

  I used this custom indicator to plot and debug FIBO levels:

  DEFPARAM CalculateOnLastBars = 3000 DEFPARAM DrawOnLastBarOnly = True //ONCE p = 100 ONCE p = max(1,min(9999,p)) //range 1 - 9999 IF BarIndex <= EndBar THEN HH = highest[p](high) LL = lowest[p](low) Diff = HH - LL Fib0236 = Diff * 0.236 Fib0382 = Diff * 0.382 Fib0500 = Diff * 0.500 Fib0618 = Diff * 0.618 Fib0764 = Diff * 0.764 Up = 0 Dn = 0 FOR i = 0 TO (p - 1) IF high[i] = HH THEN Up = 1 BREAK ENDIF IF low[i] = LL THEN Dn = 1 BREAK ENDIF NEXT ENDIF DRAWHLINE(HH) coloured(238,122,233,255)//(0,128,0,255) DRAWHLINE(LL) coloured(238,122,233,255)//(0,128,0,255) LastBar = min(EndBar,BarIndex) IF Up THEN DRAWTEXT("---------------------------(23.6%)",LastBar,HH - Fib0236,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(38.2%)",LastBar,HH - Fib0382,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(50.0%)",LastBar,HH - Fib0500,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(61.8%)",LastBar,HH - Fib0618,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(76.4%)",LastBar,HH - Fib0764,SansSerif,Bold,10)coloured(238,122,233,255) ELSIF Dn THEN DRAWTEXT("---------------------------(23.6%)",LastBar,LL + Fib0236,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(38.2%)",LastBar,LL + Fib0382,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(50.0%)",LastBar,LL + Fib0500,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(61.8%)",LastBar,LL + Fib0618,SansSerif,Bold,10)coloured(238,122,233,255) DRAWTEXT("---------------------------(76.4%)",LastBar,LL + Fib0764,SansSerif,Bold,10)coloured(238,122,233,255) ENDIF RETURN

  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

  DEFPARAM CalculateOnLastBars = 3000 DEFPARAM DrawOnLastBarOnly   = True //ONCE p  = 100 ONCE p     = max(1,min(9999,p))       //range 1 - 9999 IF BarIndex <= EndBar THEN    HH      = highest[p](high)    LL      = lowest[p](low)    Diff    = HH - LL    Fib0236 = Diff * 0.236    Fib0382 = Diff * 0.382    Fib0500 = Diff * 0.500    Fib0618 = Diff * 0.618    Fib0764 = Diff * 0.764    Up     = 0    Dn     = 0    FOR i = 0 TO (p - 1)       IF high[i] = HH THEN          Up = 1          BREAK       ENDIF       IF low[i] = LL THEN          Dn = 1          BREAK       ENDIF    NEXT ENDIF DRAWHLINE(HH) coloured(238,122,233,255)//(0,128,0,255) DRAWHLINE(LL) coloured(238,122,233,255)//(0,128,0,255) LastBar = min(EndBar,BarIndex) IF Up THEN    DRAWTEXT("---------------------------(23.6%)",LastBar,HH - Fib0236,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(38.2%)",LastBar,HH - Fib0382,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(50.0%)",LastBar,HH - Fib0500,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(61.8%)",LastBar,HH - Fib0618,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(76.4%)",LastBar,HH - Fib0764,SansSerif,Bold,10)coloured(238,122,233,255) ELSIF Dn THEN    DRAWTEXT("---------------------------(23.6%)",LastBar,LL + Fib0236,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(38.2%)",LastBar,LL + Fib0382,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(50.0%)",LastBar,LL + Fib0500,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(61.8%)",LastBar,LL + Fib0618,SansSerif,Bold,10)coloured(238,122,233,255)    DRAWTEXT("---------------------------(76.4%)",LastBar,LL + Fib0764,SansSerif,Bold,10)coloured(238,122,233,255) ENDIF RETURN

  variable EndBar is used to debug code, so that you can ban the indicator from advancing after any given BARINDEX bar.

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  Trimicha

  

  robertogozzi

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  11/23/2022 at 6:37 PM #204698
  robertogozzi

  Here is an updated version with some fixes:

  // my FIBO system // // https://www.prorealcode.com/topic/fibonacci-trading-backtest/ // DEFPARAM CumulateOrders = False DEFPARAM PreLoadBars = 0 ONCE p = 20 ONCE UPflag = 0 ONCE DNflag = 0 IF Not onMarket THEN HH = highest[p](high) LL = lowest[p](low) Diff = HH - LL IF Diff <> Diff[1] THEN UPflag = 0 DNflag = 0 ENDIF Fib0236 = Diff * 0.236 Fib0382 = Diff * 0.382 Fib0500 = Diff * 0.500 Fib0618 = Diff * 0.618 Fib0764 = Diff * 0.764 Fib0850 = Diff * 0.850 Fib1272 = Diff * 1.272 Fib1382 = Diff * 1.382 UP = 0 DN = 0 FOR i = 0 TO (p - 1) IF high[i] = HH THEN UP = 1 LastBar = BarIndex[i] BREAK ENDIF IF low[i] = LL THEN DN = 1 LastBar = BarIndex[i] BREAK ENDIF NEXT BarsAfterFIBO = max(1,BarIndex - LastBar) IF UP THEN Fib0236 = HH - Fib0236 Fib0382 = HH - Fib0382 Fib0500 = HH - Fib0500 Fib0618 = HH - Fib0618 Fib0764 = HH - Fib0764 Fib0850 = HH - Fib0850 Fib1272 = LL + Fib1272 Fib1382 = LL + Fib1382 LastHH = lowest[BarsAfterFIBO](min(open,close)) IF LastHH < Fib0850 THEN UPflag = -1 ENDIF ELSIF DN THEN Fib0236 = LL + Fib0236 Fib0382 = LL + Fib0382 Fib0500 = LL + Fib0500 Fib0618 = LL + Fib0618 Fib0764 = LL + Fib0764 Fib0850 = LL + Fib0850 Fib1272 = HH - Fib1272 Fib1382 = HH - Fib1382 LastLL = highest[BarsAfterFIBO](max(open,close)) IF LastHH > Fib0850 THEN DNflag = -1 ENDIF ENDIF IF UP AND (UPflag = 0) THEN IF (close < Fib0500) AND (BarsAfterFIBO >= 2) THEN UPflag = 1 ENDIF ELSIF DN AND (DNflag = 0) THEN IF (close > Fib0500) AND (BarsAfterFIBO >= 2) THEN DNflag = 1 ENDIF ENDIF ELSE UPflag = 0 DNflag = 0 UP = 0 DN = 0 ENDIF IF UP AND (UPflag = 1) AND (close >= Fib0382) AND Not OnMarket THEN BUY 2 Contract at Market SELL AT Fib0500 STOP //SL SELL AT Fib1382 LIMIT //TP ENDIF IF DN AND (DNflag = 1) AND (close <= Fib0382) AND Not OnMarket THEN SELLSHORT 2 Contract at Market EXITSHORT AT Fib0500 STOP //SL EXITSHORT AT Fib1382 LIMIT //TP ENDIF IF LongOnMarket THEN SELL AT Fib0500 STOP //SL SELL AT Fib1382 LIMIT //TP IF close >= Fib1272 THEN SELL 1 Contract at Market //exit 50% ENDIF ELSIF ShortOnMarket THEN EXITSHORT AT Fib0500 STOP //SL EXITSHORT AT Fib1382 LIMIT //TP IF close <= Fib1272 THEN EXITSHORT 1 Contract at Market //exit 50% ENDIF ENDIF graphonprice Fib1272 coloured("Red") AS "TP 1" graphonprice Fib1382 coloured("Blue") AS "TP 2" //graph UP //graph DN //graph Diff <> Diff[1] //graph UPflag //graph DNflag //graph LastBar //graph BarsAfterFIBO

  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114

  // my FIBO system // // https://www.prorealcode.com/topic/fibonacci-trading-backtest/ // DEFPARAM CumulateOrders = False DEFPARAM PreLoadBars    = 0 ONCE p      = 20 ONCE UPflag = 0 ONCE DNflag = 0 IF Not onMarket THEN HH          = highest[p](high) LL          = lowest[p](low) Diff        = HH - LL IF Diff <> Diff[1] THEN UPflag = 0 DNflag = 0 ENDIF Fib0236 = Diff * 0.236 Fib0382 = Diff * 0.382 Fib0500 = Diff * 0.500 Fib0618 = Diff * 0.618 Fib0764 = Diff * 0.764 Fib0850 = Diff * 0.850 Fib1272 = Diff * 1.272 Fib1382 = Diff * 1.382 UP      = 0 DN      = 0 FOR i = 0 TO (p - 1) IF high[i] = HH THEN UP = 1 LastBar = BarIndex[i] BREAK ENDIF IF low[i] = LL THEN DN = 1 LastBar = BarIndex[i] BREAK ENDIF NEXT BarsAfterFIBO = max(1,BarIndex - LastBar) IF UP THEN Fib0236 = HH - Fib0236 Fib0382 = HH - Fib0382 Fib0500 = HH - Fib0500 Fib0618 = HH - Fib0618 Fib0764 = HH - Fib0764 Fib0850 = HH - Fib0850 Fib1272 = LL + Fib1272 Fib1382 = LL + Fib1382 LastHH  = lowest[BarsAfterFIBO](min(open,close)) IF LastHH < Fib0850 THEN UPflag = -1 ENDIF ELSIF DN THEN Fib0236 = LL + Fib0236 Fib0382 = LL + Fib0382 Fib0500 = LL + Fib0500 Fib0618 = LL + Fib0618 Fib0764 = LL + Fib0764 Fib0850 = LL + Fib0850 Fib1272 = HH - Fib1272 Fib1382 = HH - Fib1382 LastLL  = highest[BarsAfterFIBO](max(open,close)) IF LastHH > Fib0850 THEN DNflag = -1 ENDIF ENDIF IF UP AND (UPflag = 0) THEN IF (close < Fib0500) AND (BarsAfterFIBO >= 2) THEN UPflag = 1 ENDIF ELSIF DN AND (DNflag = 0) THEN IF (close > Fib0500) AND (BarsAfterFIBO >= 2) THEN DNflag = 1 ENDIF ENDIF ELSE UPflag = 0 DNflag = 0 UP     = 0 DN     = 0 ENDIF IF UP AND (UPflag = 1) AND (close >= Fib0382) AND Not OnMarket THEN BUY 2 Contract at Market SELL AT Fib0500 STOP         //SL SELL AT Fib1382 LIMIT        //TP ENDIF IF DN AND (DNflag = 1) AND (close <= Fib0382) AND Not OnMarket THEN SELLSHORT 2 Contract at Market EXITSHORT AT Fib0500 STOP    //SL EXITSHORT AT Fib1382 LIMIT   //TP ENDIF IF LongOnMarket THEN SELL AT Fib0500 STOP         //SL SELL AT Fib1382 LIMIT        //TP IF close >= Fib1272 THEN SELL 1 Contract at Market       //exit 50% ENDIF ELSIF ShortOnMarket THEN EXITSHORT AT Fib0500 STOP    //SL EXITSHORT AT Fib1382 LIMIT   //TP IF close <= Fib1272 THEN EXITSHORT 1 Contract at Market //exit 50% ENDIF ENDIF graphonprice Fib1272 coloured("Red")  AS "TP 1" graphonprice Fib1382 coloured("Blue") AS "TP 2" //graph UP //graph DN //graph Diff <> Diff[1] //graph UPflag //graph DNflag //graph LastBar //graph BarsAfterFIBO

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  robertogozzi

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  11/23/2022 at 9:24 PM #204705
  Trimicha

  Wow, thanks a lot!!! how have the results been on DAX?

  I did it by hand on SPX from 2020 to now today. that looked quite promising. but I used the “human” approach (especially, when it took to long to reach levels)

  I will test your latest version now. many, many thanks!

  

  Trimicha

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  11/23/2022 at 10:13 PM #204706
  Trimicha

  Ciao Roberto,

  I loaded the indicator and the backtest. but…it’s not doing what I want ;D

  I tested on various indices and stocks but it returns only a handful trades from early 2020. That doesn’t match with my “hand analysis”…

  My humble assumption is that there are not enough highs/lows recognized.

  I used this modified indicator from user AVT “ZigZag2” attached to show highs and lows and with a cp=1, it’s not perfect but provides a good starting point with a lot more retracements to check for signals. but… I am certainly not able to translate this into a system.

  Can I ask you to give it a [third] try? 🙂

   

  Mille Grazie,

  Michael

  

  Trimicha

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  11/24/2022 at 9:27 AM #204737
  robertogozzi

  Both the built-in ZigZag and the ZigZag2 you posted repaint, as you can see from the attached pic (it means that the signal is actually returned later, but the code plots it on a previous candle).

  Try adding the attached version below your chart and set it to histogram.

  In any case, I can make a trading system out of it. Probably having to wait for a ratracement, some delay in swing signals is not so important.

  So, basically, all you need is what you have written in your first post, where the UPper and LOWer swing points are those plotted by ZigZag2, right?

  Which and instrument TF do you plan to use most often?

   

   

  

  robertogozzi

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  11/24/2022 at 4:23 PM #204770
  Trimicha

  I use SP500/ES and that system should work on daily candles. But you could also use TSLA or QQQ for example, as I assume, that more volatile underlyings take the most out of that strategy. That said, I don’t think the underlying matters, as my main point is the recognition of the retracement (more than 50%) and the outbreak above 0.236 retracement (or below for shorts, I’ve written 0.382 before, I think, but that’s easily adjustable).

  And yes, the ZigZag2 is not perfect in identifiying each LOW and TOP but reasonably good to make for a good Backtest indication.

  I am aware that the top/lows are only recognised later, but in most cases, the 0.236 line is not crossed directly after the low is in place. so that’s the reason, why the ZigZag indicator is mentioned in the handbook as not usable for an automated system 😀

  Many thanks for your effort! I am really looking forward to it.

  Michael

  

  Trimicha

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