About the ZigZag Indicator
The ZigZag indicator for MT4 identifies significant peaks and troughs, connecting them with straight lines to highlight the most relevant swing points.
This tool assists traders in recognizing the current trend direction and the formation of complex price patterns like head and shoulders or double tops.
By focusing only on substantial price shifts, it helps maintain a clear perspective on the dominant market flow without the distraction of intraday noise.
Free Download
Download the “ZigZag.mq4” MT4 indicator
Key Features
- Connects major price highs and lows to define the current trend structure.
- Filters out market noise by ignoring moves smaller than a specific percentage.
- Simplifies the process of identifying higher highs and lower lows for trend analysis.
- Provides a stable foundation for drawing accurate trendlines and channels.
- Adjustable depth settings allow for customized sensitivity to price action.
Indicator Chart
The chart shows the ZigZag indicator drawing bold lines between significant market extremes.
It illustrates a series of lower tops and lower bottoms to confirm a bearish trend.
The lines provide a simplified view of price action, making it easier to identify the start and end of specific market waves.
Guide to Trade with ZigZag Indicator
Buy Rules
- Confirm an upward trend by identifying a series of higher bottoms on the chart.
- Wait for a secondary oscillator to reach an oversold condition.
- Enter a buy position when the oscillator begins to turn upward from the oversold level.
- Ensure the ZigZag indicator has established a new solid swing low before entry.
Sell Rules
- Confirm a downward trend by identifying a series of lower tops on the chart.
- Wait for a secondary oscillator to reach an overbought condition.
- Enter a sell position when the oscillator begins to turn downward from the overbought level.
- Ensure the ZigZag indicator has established a new solid swing high before entry.
Stop Loss
- Place the stop loss a few pips below the most recent ZigZag swing low for buy trades.
- Place the stop loss a few pips above the most recent ZigZag swing high for sell trades.
- Adjust the stop distance based on the volatility of the specific currency pair.
Take Profit
- Exit the trade when the price reaches the previous swing high or low.
- Consider closing the position if the oscillator reaches the opposite extreme zone.
- Use a trailing stop behind the most recent ZigZag peaks to protect profits.
Zig Zag & Phoenix Indicator Forex Scalping Strategy for MT4
This MT4 scalping strategy combines trend detection from the ZigZag Indicator with precise entry signals from the Phoenix Indicator.
The Zig Zag indicator helps identify the trend by connecting swing tops and bottoms, allowing traders to see higher highs and higher lows in uptrends or lower highs and lower lows in downtrends.
The Phoenix indicator provides specific buy and sell signals, with blue arrows indicating bullish entries and red arrows indicating bearish entries.
By combining these two indicators, traders can focus on scalping trades in the direction of the dominant trend with clear entry cues.
This strategy is best suited for M1 and M5 charts, making it ideal for quick scalps during active trading sessions.
Buy Entry Rules
- Confirm the trend using the Zig Zag indicator: the price should be forming higher highs and higher lows.
- Wait for a blue arrow on the Phoenix indicator signaling a buy.
- Enter a buy trade immediately after the blue arrow appears in alignment with the uptrend.
- Place the stop loss 2 to 3 pips below the most recent Zig Zag swing low or minor support level.
- Close the trade when a red Phoenix arrow appears or the trend reverses on Zig Zag.
Sell Entry Rules
- Confirm the trend using the Zig Zag indicator: the price should be forming lower highs and lower lows.
- Wait for a red arrow on the Phoenix indicator signaling a sell.
- Enter a sell trade immediately after the red arrow appears in alignment with the downtrend.
- Place the stop loss 2 to 3 pips above the most recent Zig Zag swing high or minor resistance level.
- Close the trade when a blue Phoenix arrow appears or the trend reverses on Zig Zag.
Advantages
- Combines trend detection with clear entry signals for high-probability scalps.
- Effective on low timeframes like M1 and M5 for quick intraday moves.
- Simple and disciplined strategy suitable for beginner and experienced scalpers.
Drawbacks
- Small stop losses make trades vulnerable to short-term price spikes or noise.
- False Phoenix arrow signals can occur during consolidation periods.
- Not ideal for trading during low liquidity or outside major sessions.
Case Study 1
On USDCHF M1 during the London session, the Zig Zag indicator showed an uptrend with higher highs and higher lows.
A blue Phoenix arrow appeared, signaling a buy.
A trade was entered with a 2 pip stop loss below the most recent swing low.
Price moved upward, and the trade was closed when a red Phoenix arrow appeared, netting 12 pips.
Case Study 2
On NZDUSD M5 during the New York session, the Zig Zag indicator showed a downtrend with lower highs and lower lows.
A red Phoenix arrow appeared, signaling a sell.
A trade was executed with a 3 pip stop loss above the recent swing high.
Price declined and the trade was closed when a blue Phoenix arrow appeared, capturing 15 pips.
Strategy Tips
- Use small stop losses and keep position sizes appropriate for scalping to manage risk effectively.
- Monitor multiple pairs, but focus on the setups with the clearest trend and Phoenix signal alignment.
- Close trades promptly when a Phoenix arrow appears in the opposite direction to lock in profits.
Download Now
Download the “ZigZag.mq4” MT4 indicator
FAQ
Which oscillators work best for filtering these signals?
Tools like the Stochastic Oscillator or MACD are excellent choices.
They provide the necessary timing for entries while the ZigZag indicator handles the overall trend direction.
Can I use this indicator for scalping?
Yes, by reducing the depth and deviation settings, you can make the indicator more sensitive.
This helps scalpers identify small intraday swing points on M1 or M5 charts.
Is this tool effective for identifying harmonic patterns?
It is one of the best tools for this purpose.
By highlighting the exact swing points, it makes measuring Fibonacci ratios between price legs much faster and more accurate.
Summary
The ZigZag indicator is a fundamental tool for traders who rely on price action and market geometry.
Its primary benefit is the ability to distill complex price movements into a series of clear, actionable swing points.
This makes it much easier to stay on the correct side of a trend and identify high-quality trade locations.
While it is highly effective for visual analysis, combining it with momentum oscillators adds an extra layer of confirmation.
