ZigZag & Swing Points: Market Structure

What is ZigZag?

ZigZag is a technical tool that filters out noise and shows only significant price swings. It connects swing highs and swing lows.

Swing Points Explained

Swing High: Candle higher than candles on left AND right = Marks a local peak = Potential resistance

Swing Low: Candle lower than candles on left AND right = Marks a local valley = Potential support

Why ZigZag Matters

1. Identifies Structure - Shows true trend, ignores fake moves

2. Support/Resistance - Swing points become S/R levels

3. Pattern Recognition - Easier to spot triangles, flags, wedges

4. Entry Points - Breakouts of swing levels have high probability

How to Use Swing Points

Uptrend: Higher Highs + Higher Lows = Clear trend, buy bounces off swing lows

Downtrend: Lower Highs + Lower Lows = Clear trend, sell bounces off swing highs