Zigzag pattern is a powerful Elliott wave pattern because its
distinctive internal waves
(5, 3, 5) allow technical traders to forecast the next price-action.
One is more likely to
see the zigzag pattern during the second wave and corrective phase
of an Elliott wave
to identify the zigzag pattern once one recognizes its first
of the zigzag pattern). Note
that the zigzag pattern is ABC pattern or three-component pattern
like the flat
to the flat corrections (especially the classic and running flat
corrective waves) that
pattern is a deep retracement corrective wave.
across the zigzag
a shallow corrective phase like the fourth Elliott
Use Of The Zigzag Pattern
Swing and position traders use the zigzag pattern to identify high
probability reversal trade
example, if a financial instrument rises under a
trading volume, but pulls back under
trading volume at the time when the zigzag pattern is completed, one
will apply a
top-down trading method to buy the asset. The opposite is also true
in a down
wants to sell.
traders also trade the C-part of the zigzag pattern. Though, in this
case, it is a contra-trend,
technical traders still love that trade because it is easy and less
that in each case one must apply a different times frame trading
Zigzag Pattern And Fibonacci
Fibonacci traders love to combine Fibonacci retracements with the
Indeed the pattern makes Fibonacci retracements trading more
reliable, and ultimately
help traders to avoid Fibonacci gambling.
can avoid misusing momentum oscillators such as the stochastic, CCI
and RSI by
combining both the oversold and overbought oscillators with the
the zigzag pattern with the Andrews pitchfork tool.
the zigzag pattern and double top and bottom chart patterns.
the zigzag pattern to forecast the next price-action.