Zigzag & Fibonacci Levels: Indicator for Detecting Key Market Levels

Zigzag & Fibonacci Levels: Indicator for Detecting Key Market Levels

The Zigzag & Fibonacci Levels indicator is a powerful tool that combines the identification of market reversal points through the Zigzag and the projection of Fibonacci levels to anticipate possible support and resistance zones.

This article explores in detail how this indicator works, how to configure it, and how it can benefit traders in their technical analysis.

Description of the Zigzag Indicator

The Zigzag indicator is fundamental in technical analysis for identifying trend changes by eliminating market “noise.” This indicator draws lines that connect significant high and low points, filtering minor movements based on a percentage variation or absolute highest or lowest value.

Key Parameters:

  • ZZpercent: Defines the method of Zigzag calculation (percentage or value).
  • prd: Period for calculating high and low values.
  • percent: Percentage change for Zigzag in percentage mode.

Calculation of Pivots High & Low

The indicator identifies high (pivots high) and low (pivots low) points in two ways:

  • Percent Mode: Uses percentage variation to determine pivots.
  • Value Mode: Uses the highest and lowest values over a specified period (prd).

Calculation of Direction and Direction Changes

Once the pivots are identified, the indicator determines the current trend direction:

  • dir = 1 indicates an uptrend.
  • dir = -1 indicates a downtrend.

Arrays for Each Pivot

The indicator stores the pivots and their direction in arrays, allowing precise tracking of the Zigzag points:

Drawing Zigzag Segments and Fibonacci Levels

The indicator draws the Zigzag segments and calculates the Fibonacci levels based on the trend direction:

Visualization Configuration

The indicator allows customizing the visualization of past Fibonacci levels and adjusting the colors and styles of the lines for better visual interpretation.

Conclusion

The Zigzag & Fibonacci Levels indicator combines two powerful tools of technical analysis to provide a clear view of key market levels. By using this indicator, traders can more accurately identify reversal points and anticipate possible support and resistance zones.

ZigZag & Fibonacci Levels Code:

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Risk disclosure:

No information on this site is investment advice or a solicitation to buy or sell any financial instrument. Past performance is not indicative of future results. Trading may expose you to risk of loss greater than your deposits and is only suitable for experienced investors who have sufficient financial means to bear such risk.

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  1. Fgats • 13 days ago #

    Ivan can you please explain a line of code that is puzzling me. This is line 37 . As I understand, either the value of dir is updated on line 33 or 35 or it remains unchanged so what can line 37 be used for? Thank you for your explanations and thank you for all the codes that you share here with us. Gabriel

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