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What is the Zig Zag Indicator and How it works?
As said above, The Zig Zag indicator is a popular tool among traders who want to identify significant changes in price trends. It is to be noted that this indicator won’t help you to identify the current trend. but if you combine it with trend indicators like RSI or Williams %R it can give you very good results.
This technical analysis tool works by filtering out small price movements and highlighting significant price movements. When the price changes direction, the Zig Zag indicator plots a new line that connects the last low or high to the current low or high.
By identifying these pivot points, traders can use the Zig Zag indicator to spot potential trend reversals and adjust their trading strategy accordingly. It is important to note that the Zig Zag indicator is a lagging indicator and should be used in combination with other technical indicators and fundamental analysis to make informed trading decisions. In this article, I will combine the Zig Zag indicator with Williams %R and this strategy gave me some great results.
- Zig Zag Indicator is a technical analysis tool that traders use to analyse the price movements and changes in price trends.
- This Indicator also helps traders to filter out small price movements and highlight the significant price changes.
- Using a solo Zig Zag Indicator is never a good idea and you should always consider combining the indicator with other trend indicators like William% R or RSI.
How to set the Zig Zag indicator and William %R on the Pocket Option?
The first thing you need to do is log in to your Pocket Option account. make sure to set your default chart to the candlestick.
Next, click on the indicator button and select Zig Zag from the menu.
Thirdly, click the button again and select Williams %R from the menu.
Zig Zag Strategy: How to trade with Zig Zag indicator and Williams %R indicator on Pocket Option
Trading with this indicator is quite easy. You just need to combine the golden rules of two indicators.
As you can see above the Zig Zag line is touching the support level plus the Williams %R line is near the -80 zone so, here we can place a buy trade.
Similarly, Given above the Zig Zag line is touching the resistance level plus the Williams %R line is above the -30. It is a signal of a bearish trend and we can place a sell trade here.
So, I have done my part. I have just explained to you how to trade with the Zig Zag indicator properly. I hope you have found this article helpful. I will highly suggest you to try this trading strategy on the Pocket Option demo account and once you are confident enough move to the Pocket Option real account. Till then I wish you a very best of luck.
Pros and Cons of Zig Zag Indicator
- Helps in reducing the unnecessary Market Noise
- Perfect for Analysing the signification price movements
- Can be highly effective if used with other trend indicators
- You should never use this indicator solely