![]() ![]() Should QQQQ fail to reach the 7% threshold on this bounce and then decline below 43, this temporary line would disappear and the prior ZigZag line would continue from the early August high. A move to 46.40 is needed for a gain of 7%, which would then warrant a permanent ZigZag line. This is just a temporary line because QQQQ has yet to reach the 7% change threshold. Astute chartists will notice that the last ZigZag line is up even though QQQQ advanced just 4.13% (43.36 to 45.15). The two pullbacks in July were ignored because they were much less than 7% (red arrows).īe careful with the last ZigZag line. The early June bounce was ignored because it was less than 7% (black arrow). The chart below shows a QQQQ line chart with a 7% ZigZag. From a high of 112, a stock would have to decline 11.2 points (or to a low of 100.8) to warrant another line. ![]() ![]() The ZigZag would not reverse until the stock declined 10% or more from its high. If the stock continued on to 112, this line would extend to 112 (100 to 112). If the stock advanced from a low of 100 to a high of 110 (+10%), there would be a line from 100 to 110. If a stock traded from a reaction low of 100 to a high of 109 (+9%), there would not be a line because the move was less than 10%. A ZigZag(10) will filter out movements less than 10%. A ZigZag with 5 in the parameter box will filter out all movements less than 5%. The parameters box allows chartists to set the sensitivity of the ZigZag feature. A ZigZag based on the high-low range is more likely to change course than a ZigZag based on the close because the high-low range will be much larger and produce bigger swings. High-Low-Close bars (HLC), Open-High-Low-Close (OHLC) bars and candlesticks, which show the period's high-low range, will show the ZigZag based on this high-low range. The ZigZag is based on the chart “type.” Line and dot charts, which are based on the close, will show the ZigZag based on closing prices. ![]()
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