The zig zag trading system consists of 3 simple forex indicators and is designed to trade breakouts in the overall direction of the currency trend, which is determined by a simple moving average.
A special zig zag indicator is used to trade the market breakout itself.
The concept is very simple to understand and to trade, just take a look below how it works and download the system if you like it.
Used indicators: 100 period simple moving average, NonLagZigZag, octopus_1
Preferred time frame(s): 5 minute chart and higher
Trading sessions: London and New York for M5 chart. Any session for M15 chart and higher.
Best currency pairs: any
Example: EUR/USD 15 Minute Chart
Take a look at EUR/USD price chart above (click the image to enlarge), this is a really effective, yet easy to trade forex system.
The zig zag fx system provided us with 3 trades, 1 buy trade and 2 sell trades.
All trades ended up profitable.
Take some time to learn the trading rules below and practice on a demo account first.
- Price trades above the 100 SMA
- Octopus_1 trendbars green color
- Price breaks above the previous zig zag indicator high peak
==> Open buy position 1 pip above the previous zig zag indicator high peak price.
Stop-Loss: Place a protective stop-loss 1-2 pips below the most recent support level.
Price Target: Exit the buy trade at risk-to-reward 1:2 or better.
- Price trades below the 100 SMA
- Octopus_1 trendbars red color
- Price breaks below the previous zig zag indicator low peak
==> Open sell position 1 pip below the previous zig zag indicator low peak price.
Stop-Loss: Place a protective stop-loss 1-2 pips above the most recent resistance level.
Price Target: Exit the sell trade at risk-to-reward 1:2 or better.