Practice shows that, despite its usefulness, a comprehensive strategy that incorporates the principles of the Zig Zag indicator as a filter, can be more effective. As the name suggests, the indicator looks like a set of Zig Zag lines on the chart that combine local highs and lows to form a corridor that enables the trader to conduct analysis on further price movement. This is where clear trend movements appear most of times. The Zig Zag indicator can be most effective when working on long-term timeframes. Zig Zag indicator How to use the Zig Zag indicator? To build a Zig Zag indicator, there must be a certain percentage or number of points between the maximum and minimum fluctuations before a line is drawn. The zigzag indicator can use both percentages and points during construction. Swing lows: when the price is lower than the price before it, and lower than the price following it.Maximum fluctuations: when the price (usually close) is higher than the price before and after it.Zig Zag indicators use both maximums and minimums of oscillations in their calculations: The Zig Zag indicator tries to identify price trends, areas of support and resistance, as well as classic price action patterns such as head and shoulders, double bottoms and double tops. Whilst not always a common technical indicator included within trading platforms, you can download the Zig Zag indicator for free to use in popular platforms such as MetaTrader. The Zig Zag indicator can help to eliminate the noise that can occur every day in various market conditions. It can help to determine key support and resistance levels along with significant changes in price action whilst also filtering out short-term fluctuations. The Zig Zag indicator is a trading tool used by forex traders to analyze the forex market for trend reversals.
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