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ZigZag Fibonacci Forex Trading Strategy

Amandeep Sonewane | Sep. 2, 2019
ZigZag Fibonacci Forex Trading Strategy

You can now download the ZigZag Fibonacci Forex Trading Strategy for free on AtoZ Markets indicators gallery.

The reason why many traders new to using the Fibonacci retracement tool find it hard to effectively use it is because they are having trouble identifying swing points that are significant enough to be considered. This is where the ZigZag indicator comes in.

The ZigZag indicator is a great tool to use to identify swing points. If you’d backtest it, it does seem to effectively pinpoint relevant swing points. So, we will be using these swing points as a basis for measuring our Fibonacci retracement tool, and we will be waiting for the price to react at around 50% of the Fibonacci retracement tool.

Indicators:

  • ZigZag
  • zigzagarrows

Timeframe: any

Currency Pair: any

Trading Session: any

How to trade with ZigZag Fibonacci Forex Trading Strategy?

Buy (Long) Trade Setup Rules

Entry

  • The last line drawn by the ZigZag indicator should be going up
  • Use the Fibonacci retracement tool to measure the swing points from the low to the high
  • Wait for price to come back at around the 50% level
  • Wait for a the zigzagarrows indicator to print a blue arrow pointing up
  • Enter a buy market order at the close of the candle

Stop Loss

  • Set the stop loss below the blue arrow

Take Profit

  • Set the take profit at the swing high based on the ZigZag indicator

Sell (Short) Trade Setup Rules

Entry

  • The last line drawn by the ZigZag indicator should be going down
  • Use the Fibonacci retracement tool to measure the swing points from the high to the low
  • Wait for price to come back at around the 50% level
  • Wait for a the zigzagarrows indicator to print a red arrow pointing down
  • Enter a sell market order at the close of the candle

Stop Loss

  • Set the stop loss above the red arrow

Take Profit

  • Set the take profit at the swing low based on the ZigZag indicator

How to download and install an indicator?

In order to install the indicator on your MT4 platform, you need to follow these steps:

  1. Click on “Download Indicator” button located at the top right corner of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select “ZigZag Fibonacci 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.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.