Each newcomer wants to create a trading system capable of making
maximum profit on each price movement. As time passes by, traders gain
more and more experience finally reaching more realistic expectations
and abandoning their dreams to buy exactly on the very bottoms and sell
on the very tops. Everyone knows that it is impossible to trade with the
accuracy of ZigZag indicator often shown on history data. But it is
possible enough to use ZigZag to calculate the virtual maximum profit...
All traders know about this indicator and it is impossible to find
even a single trader who has not used it at least once. Some traders
liken ZigZag to Elliott waves, some use it to obtain objective data on
the current market state. Each developer of automated trading systems
has his or her own idea about ZigZag.
The terminal's standard delivery contains two types of this indicator
- standard one for several generations of MetaTrader terminals ZigZag and its color version ZigZagColor.
Over the years, many attempts have been made to improve this indicator.
Perhaps, no one knows the exact number of versions, except for Eugeni
Neumoin, developer of ZUP complex.
We have decided to use ZigZag from the standard delivery as a tool
for a simple analysis of the Automated Trading Championship currency
pairs. So, today we will finally answer the question that we could not
answer earlier due to lack of time or skills: "How much can you earn
with ZigZag (in theory, of course)?"
The Championship audience, as well as everyone interested in algo
trading, was always curious about how many Championship participants
trade some definite symbol or timeframe. Therefore, we have examined all
12 currency pairs that were available at the Automated Trading
Championship 2011 and used ZigZag to calculate the following parameters:
Calculations have been made on the period from October 1, 2011 to
December 25, 2011, which roughly covers the last year's Championship.
Calculations have been made for twelve currency pairs on 8 timeframes
from M1 to H4 inclusively. Larger timeframes have not been considered,
as they were not so popular among the participants of the Automated
Trading Championship 2011. We also wanted to know if there any
correlation between selection of a currency pair and its characteristics
in this review.
Read the full article on the Championship's website - Applying ZigZag for Analysis.