A useful service for traders Zigzag
The trader’s work largely consists of sifting the mass of false signals, which blur the ability to choose an effective place to enter the market or exit trades. Due to the small price fluctuations that are “junk” quite difficult to recognise an impending trend. As an independent visual analysis does not allow to determine with accuracy the boundaries of “noise” to the rescue of the traders have come indicators. Bitcryptonews examines the features, capabilities and technical details for the use of the ZigZag indicator.
ZigZag allows you to see the trend, eliminating small price fluctuations that are not of interest to the trader. Often used in conjunction with other indicators.
Indicator fully corresponds to its name – it is a line composed of zigzags. Each line plot represents the movement of the trend, which was recorded in the period of its formation. The main objective of the indicator join the highs and the lows cut.
Important! The indicator allows to see the price steps in the past, but is unable to predict the future.
The service can also be part of the technical analysis aimed at forecasting the price if you add more tools. However, its role would be solely to demonstrate the spent or accumulated force by the rates for the formation of its further steps.
In various versions of the trading platforms and the vast majority of terminals to meet variations of the ZigZag, but in most cases the work is prepared on the same settings.
Unlike other indicators, the ZigZag was invented by an unknown trader, who did not want to take advantage of his fame. However, despite the lack of high-profile stories of its creation, the indicator does not become any less effective at work.
The tuning indicator
The indicator offers a wide range of settings. In the screenshot you can see all available settings:
Deviation – definition of quantitative factors between the highs and lows of neighbors (candles).
Depth – corrector-stop highs and lows associated with deviation.
Change the default indicator values is not recommended, at least before choosing a trader own strategy Zigzag.
Features of the indicator
The markings on the chart is in automatic mode, the Zigzag independently calculates the most suitable for the correction and complete change of the trend zone. The final line is drawn at a time when a powerful movement. The basis of the indicator extrema, which serve as the Foundation for a visual display of the indicator.
Based on the work – creates a point at the minimum, which in the future will be built.
The zigzag belongs to the category indicators repaint – that is, when receiving new values that are the signal for the continuation of the line on top of the previously marked highs, ZigZag can change the previously defined visual display.
That traders can obtain from the ZigZag: the advantages and disadvantages of
The advantages of the indicator include the following items:
With it erased all of the market noise, it allows to focus on really important maneuvers prices;
It gives equally effective results regardless of the choice of the time interval;
It can be easily combined with many other indicators, which enhances visual perception of price location. In particular, the Zigzag excels when working with a grid of Fibonacci and Elliott wave.
The disadvantages of the Zigzag can be attributed to the following items:
The inevitable redrawing of the data;
The absence of the actual efficiency when working without connecting with other indicators.
Capabilities indicator: practice
Determine the trend
The lines clearly outline the trends and relieve the trader from the market “husk”:
Create a visual picture of the boundaries of the channels:
Looking for the levels with ZigZag
Because all indicator lines are rather short, with their help it is easy to determine stable levels of greatest interest for the rates:
Also do not forget about possibility of determination of stops:
ZigZag to determine recovery
If we apply the Fibonacci levels, we can clearly identify the process of adjusting prices based on the period:
Paying attention to the levels of 38.2, 50 and 61.8%, we see the moments of greatest power prices.
The graphic indicator may be considered as an auxiliary tool in determining the figures on the chart:
Another example (head and shoulders):
Next, you should pay attention to the Elliott wave. In their compilation the difficulty lies in determining whether the wave rastyazhenii or she moved to another. Because of the Zigzag can not be afraid to make a mistake, because it perfectly outlines such elements graphics:
Do not forget about the possibility of the definition of Gartley butterfly:
Zigzag and Bollinger
Overlay of Bollinger indicator on top allows you to set additional adjustments to the Zigzag. The trader will be able to more clearly see taksee price position.
The Zigzag indicator is a very simple tool, its proper use opens up many opportunities to the trader. Its popularity is justified by the high level of kombinatornoi and efficiency.