Thread: STOCHASTIC-indicator and the ZIGZAG-indicator! Know the truth.
STOCHASTIC-indicator and the ZIGZAG-indicator! Know the truth.
We all love the stochastic-indicator. People say, it is very powerful and there is a lot of information on the internet related to this indicator. On the other hand, the ZIGZAG indicator is not given enough recognition because people think, IT REPAINTS!
So, which of the two indicators is the real deal? In fact, I will show you that the stochastic indicator is simply the 'continuous' version of the ZIGZAG indicator. Furthermore, the end of every 'leg' of the ZIGZAG indicator corresponds to a 98-100 value or 0-2 value of the stochastic indicator.
So, in some sense, the ZIGZAG repaints because the stochastic repaints!
The beautiful thing about this secret is this: U can use the stochastic indicator to predict where/when the next leg of the ZIGZAG indicator will appear.
For example, this is your famous ZIGZAG indicator, shown in orange. Why are there two legs in this picture? Will the last leg repaint(increase in length)? Will a new leg come into existence, pointing upward?
To answer these questions and thus predict market direction accurately: read the ZZS-Certainty principle
FACT: ZZS-Certainty principle. (i) The last value of the ZIGZAG indicator corresponds to the
(98-100) or (0-2) value of a special stochastic indicator.
(i) If one condition(in (i)) is satisfied before the other, we have a contradiction. Expect price to continue to push in the same direction in order for the contradiction to be corrected!
I will use a series of examples from many time frames:
First, I hope the moderators will pardon me for the 'many' pictures below.
IN every picture, the orange horizontal lines for the stochastic indicator correspond to the 2, 50 and 98 levels!
EURUSD DAILY CHART EXAMPLES
EURUSD 4HR CHART EXAMPLES
OK, i hope you got the picture/message!
So, the stochastic-indicator and the zigzag indicator go hand-in-hand to prosperity!
(I): If a leg of the zigzag indicator appears before the stochastic indicators reaches the extreme-zone, then expect the zigzag indicator to repaint in the same direction, UNTIL THE STOCHASTIC INDICATOR GETS INTO THE EXTREME--ZONE.
(II):If the stochastic indicators reaches the extreme-zone before a leg of the zigzag indicator appears. then expect price to return back to the same level very soon or spike in the same direction, UNTIL THE ZIGZAG indicator appears.
This method is based on my principle of CONTRADICTIONS.Source: forums.babypips.com