Can Zigzag based strategies be backtested?

[kbellare]

Most indicators which have a fixed value at a bar, even when the bars progress in a backtest. E.g. SMA(10)[4] is constant even as bars progress to 3, 2, 1, 0 ->>

Not sure about Zigzag direction at the current bar in a backtest - if the Close[0] doesn't exceed the Deviation Threshold,
- is the Zigzag bar directionless (i.e. horizontal) or
- does it assume the value of Close[0]. This might point upward, but if the next bar closes below the Deviation Threshold, ZigZag would point downward.

Basically, if i have a rule such as
Buy when ZigZag[0] > ZigZag[1]; //
can this be backtested? Or, will ZigZag[0] change direction depending on value of Close[-1]

thx
Kiran

[NinjaTrader_ChelseaB]

Hello Kiran,

Thank you for your post.

The ZigZag indicator writes values historically. (This means that as it draws its plot it puts this back in time on the chart)

It doesn't set values on the current bar. Because of this, you can use the ZigZag but you have to have very advanced logic that loops through the historical data looking for changes and reacting.

So while it is possible, it would take advanced custom logic to achieve.