Indicators
Zig Zag
Zigzag is a technical indicator used to identify and highlight significant changes in price trends or price swings. It helps traders visualize the overall direction of the market by smoothing out minor price fluctuations and focusing on major price movements. The Zigzag indicator connects significant highs and lows on a chart, ignoring smaller price movements in between.
How to use it ?
The Zigzag indicator helps traders in the following ways:
Trend Identification: The Zigzag indicator helps identify the overall direction of the market. It visually displays the swings and reversals, making it easier to determine whether the market is in an uptrend, downtrend, or ranging period.
Support and Resistance: The Zigzag lines can act as support and resistance levels. Traders can observe how the price reacts when it approaches or touches these lines, as they may indicate potential reversal or breakout points.
Pattern Recognition: By connecting the swings, the Zigzag indicator can help traders identify chart patterns such as triangles, head and shoulders, or double tops/bottoms. These patterns may provide insights into potential price movements and trading opportunities.