The Zigzag indicator is a series of trend lines connecting
significant peaks and foundations at the price plot. Minimum price
change parameter determines the percentage for the price to move in order
to form a new "Zig" or "Zag" line. This indicator eliminates
those changes on the plot we analyze that are less than the given v
alue. Therefore, the Zigzag reflects significant changes only.
In most cases, we use Zigzag to facilitate the perception of plots
as it shows only the most important changes and turns. You can also
reveal Elliot Waves and various figures on the plot with its aid.
It is important to understand that the last section of the
indicator may vary depending on the changes of data you analyze.
This is one of those indicators, where a change of securities price
can provoke a change of the previous value. This ability to correct
its values by the following price changes makes Zigzag a perfect tool
for analyzing price changes that have already happened. Therefore, you
should not try to create a trade system basing on the Zigzag. It is
more suitable for analyzing historical data than for making prognoses.