ZigZag indicator

ZigZag indicator

ZigZag Indicator – simple and straightforward indicator for identifying price movements. A perfect tool for identifying waves, harmonic patterns, and price action trading. Free download.

The forex market does not move in a straight line. Although the price could follow a dominant trend (for example, an uptrend), the price movement forms ups and downs, peaks and troughs that look like wave-like patterns. Therefore, determining the price movement is an uphill task. This is where the ZigZag indicator comes in.

The Zigzag indicator removes all the noise from the market. In other words, it gives you a clear picture of actual price progress from one point to another. Therefore, it helps the traders visualize the highs and lows of a certain trading period. The indicator uses the closing price, which gives it the name zigzag indicator.

The indicator is a handy tool for finding suitable entry points, especially during highly volatile periods. It is an excellent indicator for Elliot waves analytics and tracing Fibonacci levels. The best part is that you can use the Zigzag indicator in any time frame and forex pair.

How to Use the Indicator
Zigzag indicator for Metatrader 5 pretty much a background tool. It is not as interactive as other indicators. Put differently; it provides general market information about the price movement rather than calculating or providing perfect entry points. Often used as a secondary instrument, it is an underrated indicator for technical analysis.

Now how do you use the indicator? If you are using the indicator over a particular session, you will need to define the starting point to the endpoint. However, you don’t necessarily have to set the endpoint for current sessions.

It charts market patterns ignoring small pullbacks. Therefore, it can significantly help you identify chart patterns like double touch and head and shoulder patterns. Note that the zigzag case indicator is a repaint indicator. This means that the indicator repaint when a new high or low is established.

Buy and Sell Signals
Zigzag indicator for MT5 free download is quite a unique indicator. It does have a cast in the stone bullish or bearish signal. Essentially, it acts as a confirmation tool for counting Elliott waves and identifying harmonic patterns. You should therefore use it to complement your trading strategy as confirmation for suitable sell and buy positions.

Trading Example

The chart above shows price movement for EUR/CHF on the H4 (Four hours) timeframe with default settings of 12, 5, 3. The first major high occurs before establishing a new low . The price retraces, forming a lower high before creating a double bottom chart pattern. Remember, a double bottom is a perfect buy signal. Generally, the indicator eliminates the market noises enabling us to see the bullish price pattern clearly.

Conclusion Note
Avoid using the Zigzag indicator in isolation. For instance, you can combine the indicator’s swing level with the Fibonacci level to create an overlapping confluence signal. Also, when there is a strong trend, the market will establish minimum retracements. Therefore you should adjust the setting to adapt to the trend market conditions.

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