Zig Zag Strategy Explained

[ForexArticles]

Online Forex trading requires the proper economic tools to help determine price trends and the direction of the current market. An economic tool used today on many trading websites is zig zag, a trend indicator. The strategy is used by international investors and financial advisors to help determine market price trends, short term noise filtration, and to identify patterns in charts. Investors normally use the strategy with systems, such as Elliot Wave. For those of you who don’t know about the different indicator tools used on various trading websites, the zig zag strategy is explained for information purposes only.

Explanation of Zig Zag Indicator Tool
Zig zag strategy is an indicator tool offered on online trading websites to provide effectiveness in determining stock positioning in an inclusive cycle and the current price trends. The cycle is economic fluctuation activities the economy experiences over a certain period. The period of cycle consists of times of economic growth and times of recession. When there is economic growth, there are increases in the employment rate, sales, and income. If the economy is down, which is called a recession, the employment rate decreases, as well as sales, production, and income.

How to Use Zig Zag Strategy
You may use the zig zag strategy by filtering short-term noise, which removes price changes below a particular threshold. To gain access to the zig zag tool, investors are required to sign up to trading websites and creating accounts. Online trading platforms and trading applications allow investors and financial technical analysts to set the parameters of desired preferences. Just simply input your data preferences into the fields provided on the trading website.

Recommended Parameter Setting
When using the zig zag tool, it is recommended to set the default settings between eight percent and 15 percent. You want to avoid setting the parameters too low because the results are irrelevant and useless. Most of the noise you are trying to avoid remains in the results. One of the objective of using zig zag is to remove unwanted statistics and data. You may miss important price trend profit data if the default is set low.

Technology Options for Using Zig Zag Strategy
Zig zag indicator strategy is used with Forex trading website, AlfaTrade, an online international brokerage service provider. The online trading site has three advanced technology trading platforms for investors to have access to tools for trading investment products, such as commodities and Forex. You can use the MetaTrader 4 platform to access analytical tool and execute assets. The Mobile MT4 platform allows investors to access tools using mobile devices, including iPhones, iPads, and Smartphones. To connect with traders, you will find the Mirror Trader Platform beneficial to seek the top trading strategies.

Even if you’re on the go and want to quickly make investment transactions, one of the platforms for desktop & laptop computers or mobile devices will work. Investors need quick access to advanced technology to effectively determine market price changes and position of stocks. AlfaTrade provides such technology for their clients to have access to information and knowledge about Forex trading services and useful analytical tool.

Forex Trading and Zig Zag Strategy
After signing up to trading websites, investors may use complementary tools provided on the site to help with trading decisions. Although, zig zag is used by investors and financial specialists, it should not be the primary focus for Forex trading. It should be used with other trading systems to help with analyzing retracement entries. When used with a trading system, the indicator applies to trading signals which are interpreted into other strategies of trading.

Zig Zag indicator is also referred to a lagging indication because by itself, predictions are difficult. Because Forex international market is fast pace, an online trading website containing a system with leading signals is indispensable for investors. Use the tool to analyze chart patterns, such as double downs and double tops, for instant. Zig Zag strategy uses swing highs and swing lows to calculate price trends in points and percentages. Points and percentages on the chart are between the swing high price and the swing low price.

Advantages of Using Zig Zag Strategy
The zig zag strategy is advantageous for investors when combined with other technical strategies. It becomes a technical analytical tool used to identify patterns of the chart and major trends in stock and commodity prices. One of the best advantages is allowing investors to observe the direction the market is headed. This can only be done effectively by filtering noise on price chart.

The zig zag strategy explained should provide valuable information to you about the basis, including usage and advanced technical trading technology. For additional information, consult with an expert financial advisor or guru investor.