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Using ZigZag Swings to Identify Trading Ranges and Price Levels

Article MQL5 code base
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Summary

This document describes an indicator that uses a simplified ZigZag swing series to locate trading range boundaries and support or resistance levels. Its underlying idea is to identify alternating local highs and lows, then use those turning points to automate chart constructions that otherwise require manual interpretation. The same swing framework could support other graphical analysis, such as channels, trend lines, or Fibonacci grids.

The indicator settings control how many ZigZag points to examine, how many price contacts qualify a level, the allowed distance around a level, and the typical retracement used by the ZigZag. The document explains these settings but gives no performance study or trading results. It explicitly cautions that the indicator is not ready for automated trading; its stated role is to help traders inspect ranges and levels manually. ZigZag turning points and level contacts depend on chosen parameters, and the description provides no evidence that detected levels predict future price behavior.

Key ideas

  • A simplified ZigZag identifies alternating local highs and lows for chart analysis.
  • The indicator uses those swing points to find range boundaries and support or resistance.
  • Users set the history depth, required level touches, tolerance around levels, and retracement size.
  • The author presents it as a manual analysis aid rather than an automated trading system.

Tags

Technical indicators

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.