We continue to study indicators for the MT4 trading terminal and others. This post will talk about the Forex indicator ZigZag, we will understand its settings, application, and we will be able to download modified versions of the ZigZag indicator without redrawing and lagging.
But first things first.
The most important condition for every successful trader was, is and will be the analysis of the chart and finding trends, both bullish and bearish. But sometimes difficulties arise here – small price movements create confusion and interfere with determining the main, main direction of price movement. It is in order to neutralize and reduce the so-called price noise that the ZigZag indicator is used on Forex.
Another advantage of this indicator is the unification of trend analysis on the chart. The fact is that if we used, for example, a trend line to determine the trend, then each trader would have it a little differently. That is, a certain factor of subjectivity of such analytics plays a role. And with the help of the ZigZag indicator, this factor is eliminated and for every trader who uses the same settings, the analysis result will be the same.
The ZigZag Forex indicator works very simply: using zigzag lines (hence the name), price lows and highs on the chart are connected. But not all, but only the most important of them. Thus, small movements are eliminated, and only the most significant for the trader are highlighted. With the help of ZigZag, you can simplify the perception of the chart and quickly and easily identify the main trends on it – this is its main advantage.
Application of the ZigZag indicator
Here we will look at the main ways of using the ZigZag indicator in practical trading. In fact, there may be more ways, but I will touch on the most common ones in Forex.
Also, price rebounds from important Fib levels are clearly visible: 38.2, 50, 61.8. Thus, confusion is eliminated when each trader first builds levels in his own way, and then interprets in his own way whether the level was touched or not.
It is for directly opening positions, and not just analyzing the Forex chart, that the ZigZag indicator should be used only in combination with other indicators or analysis methods, such as:
I talked about the principles of creating (and completing) a trading strategy in this article, read it, it’s interesting.
If you try to use ZigZag directly for trading without additional instruments, it will end badly. The fact is that almost any indicator is only an auxiliary tool and it is simply not intended for independent work, keep this in mind. Like others, ZigZag is not devoid of disadvantages that do not detract from its merits, you just need to know about them and read on.
Disadvantages of the ZigZag indicator
There are two main drawbacks – lagging and redrawing.
- Lagging means that the indicator follows the price, but with some delay. It does not predict the future, but processes historical data. This is where the delay comes from.
- The second drawback is redrawing. This means that on the current market data, in the far right part of the chart, the ZigZag line will change following the price, drawing new break positions. This disadvantage stems from the previous one, since the indicator does not predict the future, but has a lag, follows the price, not ahead of it. And in the process of this following, following the changes in quotations, the indicator readings also change.
But this is actually a common thing and most indicators have such problems. that’s why I say that you need to perceive the ZigZag as an auxiliary, additional tool with which you can, for example, determine the main trend, and very quickly and easily.
By the way, at the end of the post you can download modified versions of ZigZag, which are either completely devoid of such shortcomings, or they are largely reduced.
Pros of using ZigZag
- Finding the main trend quickly
- Cutting off market noise and flat
- The ability to apply on any timeframe
- Can work together with any indicators and strategies
As you sit, ZigZag has enough strengths. Now let’s move on to the settings.
ZigZag Forex indicator settings
In total, ZigZag has three settings that allow you to set the sensitivity of the indicator, that is, how much it will take into account small price fluctuations.
- Deviation – this is the main parameter, it is calculated as a percentage, by default it is set to 5%. This is the minimum price deviation at which a new break will be drawn. If it is less than 5%, it is not drawn, if it is more, it is drawn. In other words, it is a filter of price movements, those that are less than this threshold value are not taken into account.
- Depth – the minimum number of candles at which a new peak will not be drawn. Set to 12 by default.
- Backstep – sets how many minimum candles there can be between price breaks. The default is 3.
It is quite possible to leave these parameters unchanged and everything will work, or you can experiment and make the indicator, say, more sensitive, thus the number of kinks will increase. Or vice versa, you can reduce it, it all depends on your desire.
ZigZag indicator without redrawing and lagging
And now let’s talk about modified versions, in which the effect of redrawing, lagging or other shortcomings are eliminated or reduced, and there are other additional settings and changes in the code of the Forex ZigZag indicator, which complement the functionality. Instructions on how to install the indicator are here.
ZigZagger 2.0 – this indicator can give a sound alert and an arrow indicates the direction of opening a deal. It itself is not redrawn, but the signal arrow can. And here again I want to emphasize that no indicator, including the ZigZag, should be used to open a position without additional filters. But in general, this indicator is very good and greatly expands the capabilities of the standard one.
Default setting Length, which is responsible for the indicator’s sensitivity to small fluctuations, is set to 1. This is very small and you need to adjust this value to your needs and the timeframe on which you are trading. I would recommend starting your fitting experiments with a value of 5 or higher. Otherwise, the main meaning of the indicator is lost and it catches all minor fluctuations.
ZigZag triad Is an indicator of support-resistance levels based on the standard ZigZag. It does not draw lines, but instead uses dots to display levels. A very good thing and can be used to set stop losses and pullback strategies – to open trades on a rebound from the level.
ZigZag pointer – using arrows shows signals to enter the market, you can configure sending alerts to the mail, the lines themselves are not drawn.
Download the ZigZag indicator and its modified versions
You can download ZigZag in the original and modified version, which cannot be redrawn right now, just go through a simple registration procedure. There will be no spam in the mail, don’t worry.
To download ZigZag without redrawing, with alerts and other additional settings, you need to be registered on our website. It is not difficult and will only benefit you, so – Register now, and then refresh this page so that the download link appears.
The ZigZag Forex indicator is a useful auxiliary tool for traders. Despite its simple device, it has quite a wide range for use on the chart in daily Forex trading. Well, the advanced versions of the indicator that you have downloaded will arm you even more as a trader to get profit in the market. And don’t forget the rules of money management.