The Zenith indicator is a trend indicator. It allows us to find safe areas of purchase after a fall or a correction.

It is made up of several average lines that oscillate on a horizontal axis (line 0), intuitively showing the trend of the asset at each moment.

Values above line 0 indicate periods of uptrend, while values below indicate downward trends.

If we look at the following image, we will easily understand which shopping areas we should look for:




Purchase entry areas

1.- Zenith averages rising below zero, average lines crossover.

After a fall, we will look for Zenith values going up along with the averages from areas below the horizontal. At least the main line and the pink line (mean A) must be going up. The crossing of the fastest averages over the slow ones can be taken into consideration. The approximation of the averages to each other looking for a "meeting point" should put us on alert. In most cases, this "meeting point" in a higher area will be a good shopping area.

This operation is valid only in bullish or lateral trends. In steep falls it will only be valid in support areas, after the formation of double bottoms, higher minimums, etc. Zenith will give us confirmation of movement.


We see in the previous image how the Zenith has marked a bullish divergence (higher lows in the indicator, same level in the lows that the price has drawn).


2.- Buy the peaks

Another way to operate would be to open purchases after the formation of a peak, at the bottom of the indicator. At least the main line has to be going up, although the pink line (middle A) does not necessarily have to. It can be dangerous in a very steep drop, or in areas where the price fluctuates very little. But it will be very effective when the price moves laterally with enough width or in corrections during a rise.

The following image shows an example. In the area on the left, it would have given us many tickets, but with a short route. In a steep drop it is preferable to wait for the Zenith to get closer to 0.


Entry areas for sale


In general lines, we can say that the entry points for sale are the opposite of those described for purchases.

1.- Zenith averages going down, average lines crossover.

After a climb, the Zenith's stockings curve downward, approaching each other. At least Zenith's main line and A average line (pink) should point down. This situation, together with the proximity of a resistance zone, or the formation of a double roof, will most of the times be a good entry for sale.

Obviously, during a sharp rise, we should look for the moment when the price weakens.

We can say that the steeper the rise, the more violent the fall.




Taking the bottom with Zenith Indicator.

Let's see some more sales situation:


In this chart, we see how Zenith has shown the same pattern that we have mentioned, averages turning downwards, but below the line of 0, that is, in a bearish situation.


We have divided the price action into 5 phases:

1.- Strong Fall. Zenith falls below 0, initiating a bearish situation. Zenith has attempted to approach 0 but has failed repeatedly, producing a series of chain falls. These drops in price correspond to lower and lower peaks.

2.- Bullish Divergency. However, after the steepest peak, this trend is reversed, drawing higher and higher peaks, while the price does not correspond to this situation, it is not really rising, but rather falling although at a slower rate. That is, the Zenith shows a divergency.

3.- Estabilization. The price stabilizes, creating a support zone.

4.- First bullish momentum. The price reacts by going up, creating a first peak. It would be a mistake to enter the top of this peak.

5.- Support Retest. The price falls again but respects the rising trend line, while the Zenith remains above 0 and its averages tend to come together creating a very good entry opportunity.

If we can identify this situation, we can try with high probability of success to obtain the best possible price. Obviously the price does not always behave in this way, but knowing this possibility will give us an advantage when it occurs.

In any case, being on the lookout for ever higher peaks and new levels of support created will give us good buying opportunities.


Use Zenith in conjunction with other indicators.

As always, we recommend not making decisions based on a single indicator.

We can use Zenith to support our trading system, or incorporate other EP indicators: ADX EP, EP MA DIFF, EP CHANGE INDEX ... we consider essential in our operation EP PRISM INDICATOR, which shows us various configurable moving averages, something that we consider it essential to detect trends, in addition to coloring areas based on the patterns shown by the EP indicators.

We will dedicate an article to the operation with this configuration.


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