What you will learn
- Read market structure through highs and lows
- Tune the deviation threshold for your timeframe
- Tell a break of structure from an ordinary pullback
- Understand why ZigZag repaints and what to do about it
Why do you need ZigZag?
Candles jump up and down, and in that ripple it's easy to lose the main thing — where the market is even going. ZigZag removes small fluctuations and keeps only the meaningful reversals.
In the end the chart turns into a simple polyline: peak — trough — peak. It immediately shows the structure of the move.
Analogy. It's like looking at a mountain ridge from afar: the small rocks aren't visible, but the peaks and dips read at a glance.
Important. The last ZigZag segment repaints: the outermost peak/trough is confirmed only after price reverses by a threshold amount. So ZigZag is a tool of "after-the-fact" structure, not an entry signal in the moment.
What the polyline is made of — poke the points
Tap each point to understand its role. Open all three — and the step counts.
- Peak
- A local maximum (high) — the point where the up-move ran out of steam.
- Trough
- A local minimum (low) — the bottom of a pullback where price pushed off.
- Noise
- ZigZag ignores the small candles between peaks — they don't change the structure.
This is an exercise from the lesson. You can run it on a live chart in the terminal, where progress is recorded.
Try it on the chartThis is how it looks on the chart
The yellow polyline connects only the real reversals. Notice: the troughs keep going higher, and the peaks rise overall — the market is building an up structure. Meanwhile the very last peak is slightly lower than the previous one: that's how a trend sometimes starts to run out of steam.
What trend is this?
ZigZag draws higher troughs (each bottom is above the last). What does that mean?
This is an exercise from the lesson. You can run it on a live chart in the terminal, where progress is recorded.
Try it on the chartFind the last peak
Tap the last peak of the polyline — the freshest reversal point at the top right.
Check off what you've learned
- I understand that ZigZag removes noise
- I tell a peak from a trough
- I see the structure: peaks and troughs
- I read the trend direction off the polyline
This is an exercise from the lesson. You can run it on a live chart in the terminal, where progress is recorded.
Try it on the chartWhy strip out the noise
An uptrend is a sequence of higher highs and higher lows. The definition is simple, but on a real chart it drowns in small fluctuations: every candle has its own high, and telling by eye which of them are pivotal is hard.
ZigZag solves exactly that. It picks the points between which price travelled more than a given threshold and connects them. Anything smaller is treated as noise and not drawn. What remains is the structure by which a trend is defined.
The deviation setting
The only setting that matters: how far price must reverse for a point to count as significant. It is set in percent or in points.
Too small a threshold and ZigZag draws the very fluctuations you wanted rid of. Too large and the chart is left with two lines over six months, from which nothing follows.
A practical rule: pick the threshold so that roughly five to ten pivots remain on the visible screen. Then the structure is readable and the small stuff stays out of the way. The value will differ per timeframe, and that is normal.
Repainting: the thing to understand
The last ZigZag segment is always provisional. Until price has moved back by the threshold, the indicator does not know whether the current point was a high — and if the move continues, it will move that point.
One practical rule follows: never trade the last segment. It changes. Already-fixed segments can be used; they never repaint.
This is not an implementation flaw but a property of the task. A high can only be identified after price has left it; an indicator that "does not repaint" simply draws the high later.
How it is used
Mainly to identify a break of structure. While each new low is higher than the last, the uptrend is intact. The first low below the previous one signals the picture is changing, and ZigZag shows it instantly.
Second, for marking waves and levels. ZigZag points almost always coincide with the levels worth drawing by hand, and as a first draft of chart markup it saves time.
What it does not do: it gives no entries, shows no volume and does not answer whether a move will continue. It is a reading tool, not a decision tool.
Frequently asked questions
- What does the ZigZag indicator show?
- The pivotal highs and lows of a move, connected by straight lines. Fluctuations below the chosen threshold are discarded, leaving the structure that reveals the trend direction.
- Why does ZigZag repaint?
- Because the last point is provisional: until price reverses by the threshold, it is unknown whether it was a pivot. Fixed segments never change.
- What deviation should I set?
- One that leaves roughly five to ten pivots on the visible chart. The exact number depends on the instrument and timeframe; there is no universal value.
- Can you trade using ZigZag?
- Not directly — it gives no entry signals and its last segment repaints. It is useful as a tool for reading structure and as a first draft of level markup.
Other lessons in this track
- VolumeHow to read trading volume and use it to confirm price moves.
- EMAMoving averages 20/50/100/200 as trend support and resistance.
- RSIOverbought, oversold, and divergences.
- MACDMomentum and trend change from the histogram and lines.
- FractalsLocal extremes by Bill Williams.
- Trading sessionsAsia · London · New York and their character.
- WeekendWhy weekends are dangerous: thin liquidity and gaps.
Terms covered
This material is educational and is not individual investment advice.