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Zig Zag

Zig Zag

The Zig Zag method is a technical analysis strategy described in "Trading Systems and Methods". It helps traders identify and follow market trends.

📚 Understand what is the Zig Zag method?

The Zig Zag method is a technical analysis strategy used to smooth price movements and focus on important trends. It is often used in combination with other indicators to confirm buy and sell signals. Before using this method, you should have a basic understanding of technical analysis and chart patterns.

📈 Recognizing highs and lows

The Zig Zag method is based on identifying high and low points in the price action. These points are referred to as "zigs" and "zags". A Zig is a high point, while a Zag is a low point. To identify these points, you need to analyze the price history of an asset over a period of time.

🎯 Set a percentage for price changes.

A key aspect of the Zig Zag method is setting a percentage for price changes. This percentage determines when a new Zig or Zag is formed. When the price increases or decreases by the specified percentage, a new Zig or Zag is formed. This helps to ignore smaller price movements and focus on larger trends.

📊 Applying the Zig Zag method to a chart.

After you have identified the high and low points and set a percentage for price changes, you can apply the Zig Zag method to a chart. Draw a line from one zig to a zag and then to the next zig. These lines will help you identify the general direction of the market trend.

🔄 Check and adjust your strategy

As with any technical analysis method, it is important to regularly review and adjust your strategy. You should regularly review the effectiveness of your Zig Zag method and make adjustments as necessary. This may include changing the percentage for price changes or using additional indicators.

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