Strategy on ZigZag signals

This is a good trading strategy based on redrawing indicators. It would seem that it does not happen ... But you try it!

Trading strategy indicators

Non Lag Zigzag: Price 0, Length 100, PctFilter 2.0.

Zigzag Pointer: ExtDepth 100, ExtDeviation 75, ExtBackstep 15.

Trading signals

Good signal to buy: The arrow points up and the zigzag line is touched.

Good sell signal : The arrow points down and the zigzag line is touched.

Exiting a position is done in one of two cases:

1) There is a new rollback zigzag.

2) There is a signal to open in the opposite direction.

False signals strategy

Do not trade if one of the following events occurs:

- There is no arrow, but there is a ZigZag line;
- There is no zigzag line, but there is an arrow.

   

Signal confirmation

The use of multiple time ranges. The author of the strategy suggests using 3 charts for confirmation. You can limit yourself to the hourly range, but it is better to use the 4-hour time frame as well. When you see signals on all three charts, it is a very strong indicator of the trend direction.

Exit and Stop Losses

It all depends on the currency pairs. For example, if you trade on an hourly chart of GBP/JPY, it is recommended to use stop loss at least 75 pips. If you trade the same pair, on the 4-hour chart, you can use a stop loss of 200 pips. For exits, you can use either the next signal or a predetermined profit target. You can also use the MFI to assess the oversold/oversold nature of the pair.

Your profit to risk ratio should be at least 2:1. Never risk more money than you can win.

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