ZigZag filters out minor price movements, connecting only significant swing points where price changed by at least 5%. It reveals the underlying trend structure by eliminating noise.
Parameters (5%)
X-Axis: Time (swing point dates)
Y-Axis: Price (auto-scaled)
Line: Angular line connecting swing points
Dots: Significant swing highs and lows
Interpretation
Uptrend: Higher highs + higher lows
Downtrend: Lower highs + lower lows
Swing distance shows trend strength
Lagging — the last segment may repaint
Trading Signals
Read trend direction from the swing sequence
A higher low after a higher high = uptrend intact
A lower high after a lower low = downtrend intact
Use swing points for wave counting (Elliott Wave)
Price Overlay
Close Price: Actual closing price (same Y-axis, dashed violet)