Zigzag indicator secret

  • Zigzag indicator secret

    The zig-zag indicator is an indicator that serves to show changes in trends that occur in price movements. Usually, zig-zag is used by traders to look for price reversal points or reversals. At a point that is considered a reversal point, it will be connected by changes in zig-zag lines.

    You need to know that zigzag is very sensitive to any price movements, so you need to be careful when using this indicator. Because this is very sensitive, you are not recommended to use zigzag as a single indicator. You need to add some other indicators, but the zigzag indicator is used only as a tool in finding waves in the Elliot wave system.

    This indicator is needed to determine trend movements while indicating maximum prices and minimal prices.

    The indicator at a glance displays the perfect trend reversal point, but it's not that easy to understand.

    Although you can use this indicator alone, it is not wise because it is a repaint indicator. This means that it will change its direction according to the last price.

    But indicators are a good toolbox if a trader already has good skills in using this indicator well.

    What is ZIgzag Indicator?

    The zigzag is a technical indicator that can be used to find swing highs and swing lows on a timeframe.

    This indicator can be used for various trading styles, scalping or intraday as well as swing trading strategies.

    The zigzag indicator is very helpful in determining swing high and swings low for reference in our trading.

    The zigzag indicator is available on the MT4 platform, and its appearance is straightforward, it is just a line connecting swing high and swing low on a timeframe.

    However, to use the Zigzag effectively one has to follow the required parameters.

    • Depth - the indicator may repaint, so you should refer to how far the support and resistance zones are to the newly formed Zigzag pattern.

    • Deviation - you also need to pay attention to the deviation of the indicator on the trend line from positive to negative.

    You can make indicator settings to find symmetrical parameters with the ABCD pattern as a basic pattern in the harmonic pattern. By default setting, Depth = 12, deviation = 5, backstep = 3.

    In its application in trading, Zigzag can be applied alone or in combination with other toolboxes.

    In general, a combination with an Elliot pattern, or a harmonic pattern, this indicator signals a trend reversal when the leg changes direction.

    How to trade with Zigzag?

    How to use zigzags is very diverse, but I will give you how to use the zigzag indicator with other toolboxes, Fibonacci extensions, MACD, Moving average, and Bollinger bands.

    Zigzag indicator and Fibonacci extensions

    Concerning the zigzag trading strategy with Fibonacci, this is to find harmonic patterns and can determine to stop loss based on risk levels using Fibonacci.

    • The first step is to attach a zigzag indicator with the setting Depth = 20 and Deviation = 5. This is to find more significant swing highs and swing lows.

    • The second step is to draw the Fibonacci extension by taking from the three-point swing high and swing low of the Zigzag indicator.

    • Step three we are waiting for three waves at 0.618 - 0.786 or between 1.0 - 1.272, this is to find the basic ABCD harmonic pattern. This pattern does not appear often, so it takes a lot of patience to find a valid pattern.

    • For ABCD symmetric pattern, you must follow the rules of the required requirements. If this pattern has been found, step four is to wait for the candle to form a higher low for a Buy setup and a lower low for a Sell setup.

    • For stop losses, you can place below the lower low of a reversal candlestick for a Buy setup and at the higher high of a reversal candlestick for a Sell setup.

    • For taking profit preferably with a ratio of at least 1: 1 from your stop loss.

    Zig-zag indicator combination with MACD

    To display this Zig-zag indicator by calling it by clicking on the indicator list on the MetaTrader 4 used and then selecting the custom indicator, there will be a Zig Zag indicator at the bottom of the list of indicators.

    Determine the number 62. That is the percent change in price from the minimum or maximum number shown by this indicator with the intention that if the zigzag describes a straight line on the chart and shows a minimum number then the next straight line that shows the maximum number will appear after the price moves 62% more.

    There is a negative side to this indicator. If the price does not pass this percent parameter and flips and moves next in the same direction, the zigzag image will change too. Therefore, the indicator should be determined manually.

    So, when the required percent limit is determined, the trader can see the results. The indicator describes only the maximum and minimum numbers that exceed the number of percents that has been determined

    Next, let's take another indicator as a zig-zag help tool, which is MACD, and underline when the most important is the entry point.


    Take a look at the image above, when the signals of the two indicators are connected, we can conclude that if zig-zag has worked on the minimum number Signal MACD can be prepared. But the possibility is that it repaint and then MACD which is held by the zigzag is also there, so it is necessary to do it to find the signal divergence.

    So, for maximum results, you should look for buy signals from the tool. In this situation, zigzag and MACD are two indicators that help in charting the market.

    But there is a second possibility to use this indicator. This possibility is according to the Elliot wave principle. The zig-zag indicator works on impulse and correction waves. The impulse wave includes five small waves and towards the bigger and stronger tendency, while the correction wave includes three small waves and moves towards the tendency.


    Zigzag indicators with moving average

    In forex trading, you can combine zigzag indicators with moving average indicators to get profit in trading. It is recommended that you use the MetaTrader to display the indicator.

    The following is a setup guide for the zig-zag & moving average indicator.

    • Open your MetaTrader.

    • Make sure your MetaTrader is active & online.

    • Open the Daily (D1) timeframe

    • For Zigzag settings: open the insert menu, indicators, custom, then select zig zag.
      Because we do take the default from MetaTrader, then we just click ok. If you want to change the color and thickness of the line is also allowed, please click Colors.


    Zig Zag shows past performance trends and only the most important changes. This indicator filters all changes less than a certain number. Zig Zag can help you see changes by highlighting the most important reversals. In the last segment in Zig Zag, it can change based on basic plot changes.

    Without moving averages or other trend indicators, don't try to trade only with zig-zag.

    For Moving Average settings: open the insert menu, indicators, trends, then select Moving Average. Select period: 2, then click Ok.

    Repeat the process, to get the moving average period 4, distinguish the color from the moving average 2.Again, repeat the process to display 30 moving average indicators.

    How to use for the two indicators are as follows:

    • If Zig Zag has connected the price from top to bottom or vice versa then there is a trend change if the average moving 2 has crossed/passed the moving average 4. If the moving average 2 is a 4 cross moving average from the bottom up, and there are zig-zag connections, then you can do open Buy.

    • Conversely, if the average moving 2 is already cross moving average 4 from top to bottom then you can open sell, especially if the zig- zag has made a connection.
      If the moving average 2 is already cross moving average 4 and in a few days later it has crossed the moving average of 30 then there will be a trend of a significant increase or decrease in price. The target in 1 day using this indicator is 20-100 points.

    Using double zig-zag with Bollinger bands

    Zigzag settings 1:

    • Depth: 24

    • Deviation: 5

    • Backstep: 3

    • Colors: Gold

    Zig-Zag 2 Settings:

    • Depth: 12

    • Deviation: 5

    • Backstep: 3

    • Colors: Red

    Put Bollinger Bands Inator

    To install the Bollinger Bands indicator, you can directly from the MetaTrader application, by clicking Insert, select indicators, Trend, then select Bollinger Bands.


    Bollinger Bands Settings:

    • Period: 20

    • Deviation: 2

    • Shift: 0

    • Apply to: Close

    • Style: SeaGreen Medium

    HOW TO ENTRY:

    Pay attention to the meeting point between the red zigzag and zigzag gold, when it is located at the bottom of the ribbon and the upper ribbon. If the zigzag and zigzag gold meetings are supported, be prepared to do a Buy position and if the red zigzag and zigzag gold are in the resistance point, be prepared to take a Sell position. The good Time Frame used for Entry is Timeframe H1.

    Double Zigzag and Bollinger bands are a combination of easy-to-understand and many successful indicators used in Forex trading.

    Zigzag indicator no repaint mt4

    The zigzag indicator is essentially a repaint, meaning that it will reposition the endpoint to adjust to the current market price.

    If you look at the indicator line history, maybe you will think that the indicator is very accurate. But when you use it live, then you realize that the indicator repaints. Of course, the signals that have appeared are invalid and give false signals.

    The No repainting indicator relies on previous data to generate its signal. Once the indicator signal appears, it will not change following the last price change. In this way, they provide a more definite signal that doesn't change although the situation changes.

    And it turns out that there is also a zigzag which is designed as a no repaint indicator, the indicator is a fractalzigzag. Below image Fractalzigzag combines with zigzag default indicator:

    The Fractalzigzag indicator is a truly no repaint indicator, which is an arrow pointing down and arrow pointing up depending on the buy or sell signal given.

    The blue arrow indicates that the trend will go up, and the red arrow gives an indication that the trend will move down.

    Indicators can be applied to all timeframes so they can be used for all trading styles.

    Zigzag indicator no repaint mt4 free download 

    Download indicator here.

    To customize the indicator settings go to the indicator list and highlight Fractalzigzagnorepaint and click edit, in the settings box click input and enter the required parameters.

    • CalculateOnBarClose - this is set true by default, and it is recommended in the settings.

    • ZZDepth - by default uses 12 periods, you can set as needed, in long term trading usually uses a higher period than short term trading

    • ZZDev- By default, the value is 5, there is no big deviation even when changing the value, it is better to use the value 5 for ZZdev.

    How to trade with Fractalzigzag no repaint indicator

    The way to trade with this indicator is very simple, buy order when a Blue arrow appears and is followed by a bullish candlestick close.

    Meanwhile, the Sell order when the Red arrow appears is followed by a bearish candlestick close.

    How about stop loss and profit-taking are to take a distance of buy and sell positions depending on your risk management plan. When the arrow changes from your position you should close your position.

    Advantage

    The advantage of using this indicator is that it is easy to use even a newbie, traders are just waiting for the blue or red arrow to appear as a confirmation signal.

    Unfortunately, there is no zigzag indicator mt4 mobile, although some traders are quite interested in this indicator.

    Disadvantage

    This indicator is indeed a no repaint, even though the price changes the indicator remains unchanged, but the drawback is, the possibility of a false signal that appears can drag you into prolonged floating loss if you don't use a stop loss.

    So it's better if you use this indicator in combination with other indicators as a filter, for example with support and resistance.

    Conclusion

    The zigzag indicator is simple, it can help you perform analysis to find swing highs and swing lows on a timeframe.

    This indicator can also be the basis for finding the Elliott wave pattern manually. For this, using Fibonacci coalescence can be a way of measuring the Elliot wave rule.

    However, in using this indicator is to emphasize risk management, you need to have a second scenario when you often get false signals.

    The best way is to stop loss and determine a reward ratio of at least 1: 1, for once losing trades will be covered by one winning trades.

    It also depends on your policy, some traders give a loss ratio greater than the target, because it gives the price movement room to reach the target.