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Forex & Stocks Zig-Zag Chart Pattern “Price Action” Trading Strategy

ZigZag Indicator is a trend following indicator that is used to predict when a given security’s momentum is reversing. The indicator is used by traders to eliminate random price fluctuations and attempts to profit when the trend changes.

The Zig Zag tool is often used in wave analysis to determine the positioning of the stock in the overall cycle.

The Zig Zag indicator, named for the pattern of straight lines that appear to zig-zag across a technical analysis chart, operates as a filter for directional changes in price movements.

Technical analysts and forex traders apply the Zig Zag filter to remove unnecessary noise from the price chart; the goal is to focus on the important trends, not insignificant fluctuations. This indicator should never act as a trading system on its own.

Instead, the Zig Zag indicator is best used to highlight important patterns and confirm possible trend reversals.


How to install the “TraderVersity-ZigZagSystem
    • Download “TraderVersity-ZigZAgSystem” (Zip/RAR File).
    • Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
    • Copy the “TraderVersity-ZigZAgSystem.tpl” file (template) to your Metatrader Directory …/templates /
    • Start or restart your Metatrader Client.
    • Select Chart and Timeframe where you want to test your forex system.
    • Right-click on your trading chart and hover on “Template”.
    • Move right to select “TraderVersity-ZigZAgSystem” trading system and strategy.
    • You will see the “ZigZAg Systemm” is available on your Chart.


  • The Zig Zag indicator is a basic tool used by traders to identify possible trend reversals.
  • The indicator is not the only tool a trader should use to make investment decisions.
  • When starting a possible trade, the Zig Zag indicator should be the first tool used. Confirmation is then required from other, more precise trading tools. These depend on the individual trader and their overall strategy.


LONG Entry



Trading NOTE

Many traders trade with a variety of tools. The Zig Zag indicator shows when a trend could be reversing, but the trader will compare that indication against other trading tools they use in order to execute their strategy.


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