Trading ATR-Filtered ZigZag Swing Breakouts with Bracket Orders
Summary
This strategy uses an ATR-based ZigZag threshold to identify swing highs and lows after price has reversed by a sufficient amount. When the current swing direction leaves a level unbroken, it places a stop-market entry at the relevant pivot: above the recent high for a long or below the recent low for a short. If direction changes before entry, the opposite-side pending order is canceled and a candidate in the new direction can be considered. An optional session window restricts when orders may be armed.
For an entered trade, the stop distance is a chosen multiple of ATR and the profit target is a chosen multiple of that stop distance. The chart marks candidates and active entry, stop, and target levels. The write-up argues that ATR filtering may reduce noisy pivots and describes intraday use on volatile instruments, but supplies no backtest results or comparative evidence. ZigZag pivots are confirmed only after a reversal, and live fills, session settings, and order timing can affect actual performance.
Key ideas
- An ATR threshold filters ZigZag swings, with pivots confirmed after a sufficiently large reversal.
- Unbroken swing highs and lows define stop-market breakout entry levels in the current swing direction.
- An opposite swing direction cancels the pending order on the former side.
- Trade exits use an ATR-scaled stop and a profit target expressed as a multiple of stop distance.
- A configurable session window and charted candidate levels support intraday analysis, but performance is not demonstrated.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.