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Source: https://in.tradingview.com/script/1KWKB5jt-Bounce-Chart/

The ZigZag Line created from the last discussion is known as Bounce Indicator. But if we just think about Peaks and Troughs, this method is quite complicated. So, in this final step, We’re combining both ways of Swing Charting by –

  1. Marking the peak and troughs from the Normal Swing Charting.
  2. Marking the ZigZag Line as Bounce Indicator.

Q. What is Swing Charting here?

Any chart that contains swings is called Swing Chart. One can consider –

  • Normal Swing High, Normal Swing Low;
  • Perfect Swing High, Perfect Swing Low;
  • Peak, Trough derived from normal swings;
  • Peak, Trough derived from bounce methods;

to define swings. These are all variations defined on various logics.

Q. What is the ZigZag Line?

Connecting the Swings creates the ZigZag Line. It filters out insignificant fluctuations. This is an integral part of the Swing charts.

The term ZigZag and Bounce is a metaphor of the same thing. Like a Ping Pong game, the price moves from one swing to another swing!

*Bounce Line, Bounce Indicator, ZigZag Line, ZigZag Indicator is the same thing and their construction depends and varies with the associated Swing Chart.

Q. Between two peaks, Should we always choose the candle among them having the highest point as a peak?

When we defined peak and trough first time using the concept of Perfect Swing Highs and Perfect Swing Lows; We focused on the selection of the highest point as a peak which is creating this confusion. Now, when we are defining peak and troughs according to Bounce Strategy; We’re focusing on a set of rules. Here, there can be cases where the highest point is not a peak. Like, the first candle after a trough satisfying the conditions of a peak is always a peak irrespective of its height compared to following peaks.