Stockchart's Price Label

Hi. I’m new here and have enjoyed your trading discussions. Have a question about using stockchart’s price label to determine entries and exits. I found stockchart article saying this…

“When using Price Labels, it is important to remember that Price Labels are not trading signals. They are not intended for that purpose.
The Price Labels are based on a calculation that looks “ahead” in time - i.e. it needs data on both the left and the right of the bar where the label appears. They are similar to the Zig Zag indicator in that regard. While it looks like they gave good signals in the past, that is because we “cheat” and look into the future when deciding where to draw them. That makes them useless for trading signals because you’ll never see a Price Label appear at the far right edge of a chart. Another problem is that Price Labels often move as the chart develops further. Finally, we sometimes tweak the exact algorithm we use for placing Price Labels and so we haven’t fully documented it.
Remember, Price Labels are there to show you the value of the stock at “significant” peaks and troughs so that you do have to look those values up in a table or use the inspector and move your mouse to see them. That is their only real purpose.”

My question is when do price labels move? Since they move depending how the chart develops how can they be reliably used for trading? Thanks.


There’s a Chinese proverb that goes like this. “Never try to tell someone that something is impossible who’s already doing it.”

Stock Charts says that the marked lows and highs over a given stretch of time can’t be used as trading signals, though Quill, in fact, does just that with his use of the “smiley faces” that BarChart places over/under highs and lows. Same-same with the ZigZag indicator. I’ve seen workable trading systems based on it, though SC says it can’t be done.


1 Like

Been there, posted same. Both in the old forums and in this one. I can predict the response. But here’s the thing, the hand-waving discussion of “The Rules” tends to cloud the whole discussion and important details can be missed. New highs and lows and Price-labels from Stockcharts are still important “indicators” or price points. They are, however, NOT the entire signal. Key is to make sure you look for secondary indicators to confirm the move. Either those of your choice and testing, or those that are often missed in the discussion of the rules by the author.

I believe they print after about a half-hour into the market (but do not know that absolutely). They can repaint the next day based on the prior close and new opening direction, but don’t always. Hence, the secondary indicators need to also support your choice in trade and direction.

By the way, it’s also interesting in that the price-labels are different in number and printing between Sharpcharts and ACP. I actually asked Stockcharts what the difference was and why, the answer was unique:

"The difference is related to how we calculate them, and that information isn’t available for discussion.

Please let me know if you have any other questions or comments about our website.

Thank you,
Jack Smith"

Kinda funny, seems like a data driven item would be calculated and displayed the same on programs that just display the data. Clearly they have some fudge component.



Thanks to everyone for your replies. After looking at the price labels at stockcharts Acp it looks like they are simply generated by the ZIGZAG indicator, which shows up a little different that the traditional stockcharts ZIGZAG. If you plot ZIGZAG for any security on ACP you will see a perfect match with the price labels. The problem is once the percentage move of the security reaches the ZIGZAG percentage a price label will be generated once the security changes direction. Today ENPH showed a price label for a while since the stock rebounded, but after 11:00am the price label went away since the stock price went below the low price generated by the price label, which perfectly matched the ZIGZAG line which no longer pointed up.

This means that when someone shows a longer term chart the chart will only show the last price label, not others that were generated once the ZIGZAG percentage move occurred. There are likely longer term moves that had MANY price labels that were generated then removed as the price returned to the major trend. Do not believe someone who only shows the perfectly placed Price Labels at peaks and valleys who tells you those were the only trades.


Thanks for the info frenner,

In ACP, their Zigzag default is set at 6.93% but in Sharpcharts, it’s set at 3.75% and the peaks also match Sharpcharts price points. If you use the 6.93% in Sharpcharts, it matches the same price labels as in ACP but skips some and viceversa. Still not clear why they calculate differently between the modes of displaying the data.

Not critical as the point is still that price-labels or zigzags are not “the” indicator, just another data point. But gives some help in trying to develop/write scanning combo’s.