ZigZag is an indicator that draws lines across the forex chart connecting swing highs to lows. It forms what appears to be zigzagging line. It's based on price fluctuations that are out of line with the current market flow. It also attempts to reduce noise by reducing minor fluctuations.
The ZigZag indicator can be used in many different ways. The ZigZag indicator can be used in almost any strategy that uses swing highs or lows. It basically tracks swing points objectively.
The swing points can be used as entry points to the indicator. Swing points often signal the beginning of a move. These moves could be long-lasting enough to allow traders to make a profit.
We know that the ZigZag indicator can help determine swing points so we will use these swing points to identify entry points in the hopes that the swing point might be the beginning of a profitable price move. Swing lows are the entry point to long trades, while swing highs are the entry point to short trades.
The confluence between the two ZigZag indicators will be what we are looking for as entry points. This would increase your chances of a profitable trade setup, and filter out low probability swing point.
Our exit will hinge on ZigZag's indicator, which prints more swing points. This will allow us to exit the trade quickly on a long-term move, but it will also prevent us from staying in a trade that could reverse.
It will act as an arrow, pointing the way and telling you when to enter the market.
Like the ZigZag indicator and want to try it out? Do it with an AtoZ Approved broker for free:
Currency Pair: Any pair you like
Timeframe: H4 chart
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How to trade with ZigZag Arrow Forex Trading Strategy
Buy (Long) Trade Setup Rules
- The ZigZag indicator identifies the swing low candle and connects it to a line.
- The ZigZag indicator is compatible with the zigzag arrows indicator. It determines the current candle as swing low and prints an up arrow.
- Place a buy order at the end of the candle
- Place the SL under the lower side of the candle stick.
- You should close the trade immediately a red arrow points down appears. This could indicate a swing high.
Sell (Short) Trade Setup Rules
- The ZigZag indicator identifies the current candle's swing high and connects it to its high.
- The ZigZag indicator is compatible with the zigzag arrows indicator. It determines the current candle's swing high and prints an arrow pointing downward.
- Place a sell order at the end of each candle
- Place the stop loss at the top of the candle
- You should close the trade immediately a blue arrow pointed up appears. This could indicate 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.
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