You can now download the ZigZag Arrow Forex Trading Strategy for free on AtoZ Markets indicators gallery.
The ZigZag indicator is an indicator that draws lines on the forex chart, connecting swing highs and lows, forming what seems to be zigzagging lines. It is based on sudden fluctuations in price that goes against the current flow of the market. At the same time, it also tries to eliminate minor fluctuations in order to lessen noise.
There are many ways to use the ZigZag indicator. Practically any strategy that makes use of swing highs and lows could benefit from the ZigZag indicator as it basically traces swing points objectively.
However, one of the ways to use the indicator is to make use of the swing points as entry points. Swing points are often the start of a move. Moves that could last long enough and move far enough for traders to profit from.
Knowing that the ZigZag indicator helps determine swing points, we will be making use of these swing points as entry points with the hope that the swing point could be a start of a good profitable move in price. Swing lows will be the entry point for long trades and swing highs will be the entry point for short trades.
As for the entry points, what we will be looking for would be the confluence of the two ZigZag indicators. This would increase the probability of having a profitable trade setup and filter out low probability swing points.
On the other hand, our exit will be based on the ZigZag indicator that prints more swing points. This could get us out of the trade pretty early on a long move but will help us avoid staying on a trade that could already reverse.
It will be like an arrow pointing which way to go, when to enter the market and when to exit the market as it is about to reverse.
Currency Pair: any
Timeframe: 4-hour chart
Trading Session: any
How to trade with ZigZag Arrow Forex Trading Strategy
Buy (Long) Trade Setup Rules
- The ZigZag indicator determines the current candle as a swing low and connects a line to its low
- The zigzagarrows indicator agrees with the ZigZag indicator determining the current candle as a swing low and prints a blue arrow pointing up
- Enter a buy market order at the close of the candle
- Place the SL below the low side of the candle stick.
- Close the trade as soon as a red arrow pointing down appears, which could be a swing high.
Sell (Short) Trade Setup Rules
- The ZigZag indicator determines the current candle as a swing high and connects a line to its high
- The zigzagarrows indicator agrees with the ZigZag indicator determining the current candle as a swing high and prints a red arrow pointing down
- Enter a sell market order at the close of the candle
- Set the stop loss above the high of the candle
- Close the trade as soon as a blue arrow pointing up appears, which could be a swing low
How to download and install an indicator?
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on “Download Indicator” button located at the bottom of the screen.
- Save the file to your computer.
- Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select “ZigZag Arrow Forex Trading Strategy” template to apply it on the chart.
Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.