What it is
ZigZag is a drawing tool more than a signal. It looks back over the candles and only records a turn when price has reversed by at least the swing size. Everything smaller is treated as noise and skipped, so what is left is the shape of the market: the legs up and the legs down.
That makes it ideal for spotting market structure, measuring how far legs travel, and placing Fibonacci or pattern tools. The catch is that the latest leg is never final. Until price reverses by the full swing size, the last line keeps stretching to the newest extreme.
How it is calculated
1. Choose a swing size, either a fixed percentage (0.25% to 20%) or auto, where WickSpeak picks one from the market's recent movement. 2. Start from the first candle and track the highest high while price is rising. 3. When price falls from that high by at least the swing size, mark the high as a swing high and start tracking the lowest low. 4. When price rises from that low by at least the swing size, mark the low as a swing low and start tracking highs again. 5. Join each swing point to the next with a straight line. The final point keeps moving until a full-size reversal confirms it.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Swing size | auto | auto, 0.25%, 0.5%, 1%, 2%, 3%, 5%, 8%, 12% or 20% | The smallest reversal that counts as a new swing. Smaller sizes show every minor wiggle; larger sizes show only the major legs. Auto picks a size that fits the market and timeframe. |
How to read it
How to trade it
- 1
Set swing size to auto on a 1 hour chart of gold or US30 and read the structure: are the swing lows rising or falling?
- 2
In an uptrend, wait for price to pull back into the last up-leg, ideally into its middle, and buy when a candle closes back up in your favour.
- 3
Place the stop just below the last confirmed swing low. On a 1 hour US30 chart that is often 80 to 150 points away.
- 4
Target the last swing high first, then a leg of the same size as the previous up-leg measured from the new low.
- 5
Never trade off the unconfirmed last point. Wait for the reversal that fixes it.
A buy in an uptrend is proved wrong when price closes below the last confirmed swing low, because the higher-low structure the trade relied on no longer exists.
WickSpeak runs in your browser with nothing to install. When you add ZigZag, it writes a plain-English reading on the live candle: what the indicator is, what it is doing right now, how to trade it and what would prove that reading wrong. It describes the current structure from the confirmed swings and warns when the last leg is still open. If the chart has no swings of the chosen size, it tells you to pick a smaller swing size rather than drawing nothing.
ZigZag is a drawing tool in WickSpeak and is not one of the indicator conditions in Playbook. For swing-based plays, use the breakout, pattern and price level conditions instead.
Best markets and timeframes
Useful on every market and timeframe because it adapts to the swing size. On gold and indices, auto on 15 minute to 4 hour charts gives a clean structure; use a fixed 1% or 2% on daily charts to see the bigger legs.
Common mistakes
- Backtesting by eye with ZigZag, which flatters every idea because the last leg is redrawn after the fact.
- Using a swing size so small that every candle becomes a swing and the structure disappears.
- Entering at the tip of the current leg as if it were a confirmed turn.
Works well with
Questions traders ask
Does the ZigZag indicator repaint?
Yes, the last leg does. It keeps extending to the newest high or low until price reverses by the full swing size, and only then is that point fixed. Earlier, confirmed swings do not change.
What is the best ZigZag setting?
There is no single best value. A swing size around 0.5% to 1% suits intraday gold and index charts, and 2% to 5% suits daily charts. WickSpeak's auto setting picks a size from the market's own recent movement, which is a good starting point.
Can you trade with ZigZag alone?
Not well, because it does not give an entry signal in real time. Use it to read structure and place stops, then take entries from a candle pattern, a level or an oscillator.
What is the difference between ZigZag and fractals?
Fractals mark any candle whose high or low beats a few candles either side, so they appear often. ZigZag only records turns of a minimum size, so it shows fewer, more meaningful swings.