The Zig Zag indicator filters out minor price movements and highlights significant price swings by connecting swing highs and swing lows. It helps traders identify trend reversals, support and resistance levels, and major price patterns by eliminating market noise. The indicator draws straight lines between significant pivot points, making it easier to visualize the overall direction and structure of price movements.

Settings of Use

Clicking on the indicator's settings icon will open its configuration window, within which it will be possible to make several choices regarding the functionality of the indicator itself.

Zig Zag Settings

Zig Zag Mode

Defines the method used to identify significant swing points. The available options are:

• Highest lowest: Identifies swing points based on the highest high and lowest low within a specified range, using a more traditional approach that considers the extreme price levels over a given period.

• Absolute reversal: Uses a fixed percentage price reversal to determine swing points. This method requires a specific percentage price movement in the opposite direction to confirm a new swing.

• Tick reversal: Uses a fixed number of ticks as the reversal threshold. This method is more suitable for instruments with specific tick sizes and provides consistent swing identification regardless of price level.

Zig Zag Abs. Rev

When using Absolute Reversal mode, this parameter sets the minimum percentage price change required to identify a new swing point. The default value is 0.50%. Higher values result in fewer, more significant swings by filtering out smaller price movements, while lower values create more frequent swing identifications that capture smaller price changes. This setting directly affects how the indicator balances between signal clarity and responsiveness.

Zig Zag Tick Rev./Highest Lowest

This dual-purpose parameter serves different functions depending on the selected Zig Zag Mode:

• For Tick Reversal mode: Defines the number of ticks required for a reversal. The default value is 10. Increasing this value makes the indicator less sensitive, identifying only major swings, while decreasing it makes the indicator more responsive to smaller price movements.

• For Highest Lowest mode: Sets the lookback period (number of bars) used to identify the highest high and lowest low. This determines the range over which extreme price levels are evaluated.

Color Up

Sets the color for the zigzag lines during upward swings (bullish movements). 

Color Down

Sets the color for the zigzag lines during downward swings (bearish movements). 

Line Width

Adjusts the thickness of the zigzag lines displayed on the chart. The default value is 2. Increasing this value makes the swing lines more prominent and easier to see, especially when analyzing charts on smaller screens or when monitoring multiple indicators. Decreasing it creates thinner, more subtle lines that reduce visual clutter on busy charts.

Retracement Settings

Background Color

Sets the background color for the retracement level labels displayed on the chart. This background helps the text stand out against the chart and improves readability, especially when the chart contains complex price action or multiple overlapping elements.

Font Size

Adjusts the text size for retracement level labels. The default value is 11.00. Larger font sizes make the labels more visible and easier to read, particularly useful for presentations or when monitoring charts from a distance.

Font Color

Sets the text color for the retracement level labels. Choose a color that provides strong contrast against the background color for optimal readability. The color should be easily visible in various lighting conditions and chart backgrounds.

Line Width

Adjusts the thickness of the retracement level lines drawn on the chart. The default value is 1. Thicker lines make the retracement levels more prominent and easier to identify, while thinner lines create a more subtle appearance that doesn't dominate the chart visual.

Line Color

Sets the color for the retracement level lines. This color should be distinct from both the zigzag line colors and the main chart elements to ensure the retracement levels are clearly visible and easily distinguished from other indicators.

Show 38.2%

When enabled, displays the 38.2% Fibonacci retracement level on the chart. This is one of the key Fibonacci ratios, often used to identify potential support or resistance areas where price might reverse or consolidate during a retracement of the previous swing.

Show 50%

When enabled, displays the 50% retracement level on the chart. While not a true Fibonacci ratio, the 50% level is widely watched by traders as it represents the midpoint of a swing and often acts as a significant support or resistance level during price retracements.

Show 61.8%

When enabled, displays the 61.8% Fibonacci retracement level, also known as the "golden ratio." This is considered one of the most significant Fibonacci levels, frequently serving as a strong support or resistance area where price may reverse or find equilibrium during a retracement.

Show 75%

When enabled, displays the 75% retracement level on the chart. This level represents a deeper retracement and can indicate stronger counter-trend movement. It's useful for identifying potential reversal zones when price makes a substantial retracement of the previous swing.

Extend Right

When enabled, extends the retracement level lines to the right edge of the chart, projecting them into future bars. This makes it easier to monitor whether price interacts with these levels as it develops in real-time, helping traders anticipate potential support or resistance zones ahead.

Subgraphs 

Color

Sets the primary color for the zigzag line.

2° Color

Sets the secondary color option for the zigzag line. 

Subgraph Style

Defines how the zigzag data is displayed. The default setting is "Ignore" which uses the indicator's built-in line drawing method. Other options include Bars, though the traditional zigzag representation is typically preferred for this indicator.

Auto Color

Determines the automatic coloring logic for the zigzag lines. Options include:

• +/-: Colors lines based on direction - upward swings use Color Up, downward swings use Color Down, providing instant visual feedback on swing direction.

• Bars: May apply coloring based on bar-by-bar analysis.

• Ignore: Disables automatic coloring, using the primary color setting for all lines.

Line Style

Sets the style of the zigzag lines. The default is "Solid" for continuous, unbroken lines that clearly show the swing connections. Other options include dashed and dotted patterns which can help distinguish the Zig Zag indicator from other chart elements when multiple indicators are displayed.

Line Width

Adjusts the thickness of the main zigzag line in the subgraph settings.

Short Name

Allows you to set a custom short name or label for the indicator that will appear on the chart legend.