The Forex market does not follow a straight line. While prices may follow an underlying trend (for example, an uptrend), price moves are characterized by spikes and drops, as well as peak and trough patterns that look like waves. Therefore, determining the speed of the move is a daunting task. This is where the ZigZag indicator comes in handy.
The Zigzag indicator takes out all the noise in the market. This means that it will give you a clear picture of price changes from one point to another. It helps traders to see the lows and highs during the trading period. The indicator makes use of the closing price, which is why it is called a zigzag indicator.
The indicator can be a useful tool to determine the appropriate entry point, especially during times of high volatility. It is an excellent indicator for Elliott waves and for tracking Fibonacci levels. The great thing is that you are able to use the Zigzag indicator on any time frame or forex pair.
How to use the indicator
Zigzag indicator for Metatrader 5 is basically a background tool. Compared to other indicators, it is not very interactive. In other words, it provides general market data about price movements, but does not perform calculations or provide precise entry points. It is often used as a second tool and it is an underappreciated indicator for technical analysis.
What is the best way to use this indicator? If you are using the indicator for a specific time period, it is necessary to determine the starting point and the point at which you want to end. However, you don’t necessarily need to determine the end point of the current time period.
It tracks market patterns and ignores small retracements. Therefore, it can help you identify chart patterns such as double touches, shoulders and head patterns. It is worth noting that the Herringbone indicator is a redrawn indicator. This means that the indicator is redrawn every time a new high or low occurs.
Buy and Sell Signals
The Zigzag indicator is a very unique indicator that does not require a download. It is a stone-cut bearish or bullish signal. It is basically a tool to confirm the calculation of Elliott waves and identify harmonic patterns. Therefore, you should use it in conjunction with your trading strategy as a confirmation to make sure you are in the right buy and sell options.
Use the Zigzag indicator. For example, you can use the indicator’s swing level and Fibonacci level to create an overlapping confluence signal. In addition, when there is an extreme trend, the market will set up minimum rectangles. This is why you need to adjust your settings to be able to adapt to the current market conditions.