Create a ZigZag indicator, which is constructed based on extreme values determined using oscillators. It can use any classical normalized oscillator, which has overbought and oversold zones. The algorithm should first be executed with the WPR indicator, then similarly add the possibility to draw a zigzag using the following indicators:
- Stochastic Oscillator
Algorithm and Terms
The first stage is the construction of the Zigzag:
- The overbought zone is determined as candlesticks, at which the indicator value Value > Lmax(Lmax=-20).
- The oversold zone is determined as candlesticks, at which the indicator value Value < Lmin (Lmin=-80).
- The values of Lmax and Lmin should be included in indicator parameters.
- A yellow point should be added at the High point of candlesticks in the overbought zone—it is the H point.
- A green point should be added at the Low point of candlesticks in the oversold zone—it is the L point.
- If there is at least one L point between two H points, search for a LL point in the interval between two H points. The candlestick with the lowest Low price will be the LL point. Generally, the LL point is not necessarily an L point. Search for candlesticks with the lowest Low price.
- If there is at least one H point between two L points, search for a HH point in the interval between two L points. The candlestick with the highest High price will be the HH point. Generally, the HH point is not necessarily a H point. Search for candlesticks with the highest High price.
- Connect LL and HH points to draw a ZigZag. The default color is yellow. The first step is finished.
50% / 32%