The ZigZag Oscillator is a handy tool that presents a colored histogram in a separate chart window, showing the distance of the Close price from the ZigZag pivot point, also known as a break.
This indicator comes with four customizable parameters:
- ZigZag Depth - This sets the depth for the ZigZag calculation.
- ZigZag Deviation - This parameter adjusts the deviation level for the ZigZag.
- ZigZag Backstep - This works to define how far back the calculation looks.
- ZigZag Pivot Point - The starting point for calculating the distance.
Calculation:
ZZOsc = 100 * (Close - LastZZ) / LastZZ
Where:
LastZZ - The ZigZag price at the pivot point
If the pivot point is set to zero, the calculation will begin from the nearest left ZigZag break or from the end of its last ray.
Fig. 1. ZigZag Oscillator with ZigZag, Pivot Point = 0
Fig. 2. ZigZag Oscillator with ZigZag, Pivot Point = 1
Fig. 3. ZigZag Oscillator with ZigZag, Pivot Point = 2
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