Indicator

Trend Filtered ZigZag Indicator

We have introduced Equilibrium Fractal Wave Concept to the Trading Community. Then how we could visualize the concept of Equilibrium Fractal Wave and help you to use the concept for your trading? Well, Trend Filtered ZigZag Indicator is just the right answer for that. Literarly, Trend Filtered ZigZag indicator help you to separate the effect of trend from the effect of Fractal wave, which were co present together inside the equilibrium fractal wave. What is the methodology behind it? Well, it is simple. Firstly, we need to remove the trend from the original price series. This is called detrending process. Then we construct the detrended ZigZag indicator from the detrended series. Now here is the important bit. The detreneded ZigZag indicator is useless for your trading because they do not track how the entire price moves. Typically the detrended ZigZag indicator will be placed in the separate indicator window. Now, we transform our detrended ZigZag indicator again back to construct the Trend Filtered ZigZag indicator.  With the constructed trend filtered ZigZag indicator, we do not miss the pure effect of the fractal wave as well as the pure effect of trend. The benefit of the Trend Filtered ZigZag indicator is that you can now isolate the repeating patterns from the effect of the trend. Therefore, the repeating patterns will reveal themselves with more clear structure.


Published Current Version Updated Visits
2 July 2018 2.7 5 July 2018 173