FTB-C000597 / Formula component

ZigZag Reversal Fraction

ZigZag Reversal Fraction is the fractional opposite move required to confirm a provisional ZigZag extreme.

Also known asreversal threshold

Intermediate Formula defined 1 linked topicEvidence-reviewed

Definitions

In plain terms

A 5% setting requires roughly a 5% move against the current extreme before confirmation.

Technical

tau is a finite fraction with 0 < tau < 1 and is compared using the selected high-to-low or low-to-high return formula.

Scope

A percentage threshold is not the same as an absolute price-unit threshold.

Formula

tau is the opposite percentage move required for confirmation
LaTeX: 0<\tau<1
SymbolMeaningUnit
taureversal fractionfraction

Output unit: fraction

Examples

  • A reviewer computes ZigZag Reversal Fraction on a small deterministic fixture and checks timing, units, and boundary behavior before publication.

Common misconceptions

  • A percentage threshold is not the same as an absolute price-unit threshold.

Concept relationships

Prerequisites

Related

Required by

Where this concept is used

Tutorials planned

These catalogued topics use this concept, but their complete build has not shipped yet.

  • D08-F01-A02 Important

Evidence and governance

  1. Zig Zag indicator QuantConnect · official platform documentation

    Supports: preferred label, short definition, technical definition, formula

    Limits: This package selects a close-only percentage-reversal variant and documents the difference.

  2. LEAN ZigZag source QuantConnect · first party technical publication

    Supports: preferred label, short definition, technical definition, formula

    Limits: A maintained implementation is evidence for one convention, not a universal market rule.

  3. Pine Script repainting concepts TradingView · official platform documentation

    Supports: preferred label, short definition, technical definition, formula

    Limits: Platform display behavior does not establish financial usefulness or predictive value.

  4. Closing Price Investor.gov · official standard

    Supports: preferred label, short definition, technical definition, formula

    Limits: A close is not automatically an adjusted close and may vary by market session convention.

Reviewed by
fintech-builder-batch-011
Last reviewed
2026-08-09
Next review
2027-08-09
Record status
evidence reviewed

This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.

Written by

Fintech engineer building market-data and financial systems, and the author of every article, glossary record, and reference implementation on The Fintech Builder.