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Back to Indicators
TrendLagging

ZigZag

Overview

The ZigZag indicator filters out minor price fluctuations by only plotting lines when price moves by a specified percentage, making macro swing highs and lows visually clear. It is an invaluable tool for wave analysis, Fibonacci retracement placement, and identifying structural patterns in stocks and crypto. Use ZigZag on TradingView as a structural overlay alongside your trending trading strategies.

How It Works

ZigZag draws a line from swing high to swing low only when the price change exceeds a user-defined threshold (typically 5%). The indicator repaints — it will adjust the most recent segment as new price data arrives. It does not predict future moves; it clarifies past structure.

Key Signals

  • Higher highs and higher lows on ZigZag confirm an uptrend structure.
  • Lower highs and lower lows on ZigZag confirm a downtrend structure.
  • ZigZag swing points are ideal anchor points for Fibonacci retracements.
  • Use ZigZag to count Elliott Wave structures more accurately.

Common Mistakes

  • Using ZigZag for real-time signals — it repaints and should not be used for entries.
  • Setting the threshold too low, which defeats the purpose of filtering noise.
  • Treating ZigZag as predictive — it is a retrospective structural tool only.

More Trend Indicators

Simple Moving Average (SMA)

The Simple Moving Average calculates the arithmetic mean of a security's price over a specified period, smoothing out noise and revealing the underlying trend direction. As one of the foundational tools in <a href="/academy/indicators" class="text-primary hover:underline">technical analysis</a>, the SMA helps traders identify long-term trends in <a href="/market/stocks" class="text-primary hover:underline">stocks</a>, <a href="/market/crypto" class="text-primary hover:underline">crypto</a>, and <a href="/market/forex" class="text-primary hover:underline">forex</a> markets. Pair it with the <a href="/academy/indicators/exponential-moving-average" class="text-primary hover:underline">Exponential Moving Average</a> for faster signals, and visualise both on a professional <a href="/tools/platforms/tradingview" class="text-primary hover:underline">charting platform</a> like TradingView.

DMI — Directional Movement Index

The Directional Movement Index plots +DI and −DI lines to reveal whether buyers or sellers are in control, and is typically used alongside the <a href="/academy/indicators/adx" class="text-primary hover:underline">ADX</a> to gauge trend strength. DMI excels in trending <a href="/market/forex" class="text-primary hover:underline">forex</a> and <a href="/market/crypto" class="text-primary hover:underline">crypto</a> markets, where clean directional moves produce reliable crossover signals. Integrate DMI into your <a href="/strategies" class="text-primary hover:underline">trading strategies</a> and confirm with volume tools from our <a href="/academy/indicators" class="text-primary hover:underline">indicator guide library</a>.

SMMA — Smoothed Moving Average

The Smoothed Moving Average applies equal weight to all historical data rather than dropping off older values, producing an ultra-smooth line that excels at identifying the dominant long-term trend. SMMA is the smoothing method used inside the <a href="/academy/indicators/adx" class="text-primary hover:underline">ADX</a> and <a href="/academy/indicators/atr" class="text-primary hover:underline">ATR</a> calculations, making it a foundational building block in <a href="/academy/indicators" class="text-primary hover:underline">technical analysis</a>. It is best suited for <a href="/market/stocks" class="text-primary hover:underline">stock</a> and <a href="/market/forex" class="text-primary hover:underline">forex</a> markets where long-term trend clarity is prized over speed.

SuperTrend

SuperTrend combines the <a href="/academy/indicators/atr" class="text-primary hover:underline">Average True Range</a> with a multiplier and median price to plot a single line that flips between support and resistance — green means uptrend, red means downtrend. It is a favourite overlay for trend-following <a href="/strategies" class="text-primary hover:underline">trading strategies</a> across <a href="/market/crypto" class="text-primary hover:underline">crypto</a> and <a href="/market/forex" class="text-primary hover:underline">forex</a> due to its visual simplicity. Apply it on <a href="/tools/platforms/tradingview" class="text-primary hover:underline">TradingView</a> alongside the <a href="/academy/indicators/adx" class="text-primary hover:underline">ADX</a> to filter entries to only strong-trending environments.

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