Zigzag With Fibo Indicator

The Zigzag with Fibo indicator for MT4 combines two powerful and time-tested tools to provide high-quality entry and exit signals. The Zigzag helps traders identify the prevailing market trend, while Fibonacci retracement levels highlight optimal entry areas during market pullbacks.

This indicator is effective on all timeframes, making it useful for intraday traders as well as swing and long-term traders. Because of its simplicity and visual clarity, it is suitable for both beginner and experienced forex traders.

How the Zigzag With Fibo Indicator Works

Once installed, the indicator automatically:

Plots the Zigzag structure to identify significant swing highs and swing lows.

Draws Fibonacci retracement levels between the most recent Zigzag high and low.

Continues updating dynamically as new swing points are formed.

This combination makes it easy to see trend direction and locate precise pullback zones where price may react.

Trading Setup Using Zigzag With Fibo

Buy Signal – Uptrend

During an uptrend:

Wait for the Zigzag to confirm a higher low.

The indicator then plots Fibonacci retracement levels from the swing low to the swing high.

Enter a BUY position when price retraces and bounces from the first two Fibonacci levels (typically 38.2% or 50%).

A break below these levels may signal a deeper correction or the start of a trend reversal.

A good stop-loss level is placed below the previous Zigzag low.

Sell Signal – Downtrend

During a downtrend:

The Zigzag identifies a lower high, triggering Fibonacci retracement plotting.

Enter a SELL position when price retraces upward and rejects key Fibonacci levels.

Place stop loss above the prior Fib level or above the Zigzag reversal point.

This method is based on the idea that price often resumes its trend direction after a Fibonacci pullback.

Tip: Always combine Fib bounces with price action confirmation—candlestick patterns, wicks, or structure breaks increase signal reliability.

Conclusion

The Zigzag with Fibo indicator for MT4 blends two complementary tools to form a simple yet effective trend-following strategy. It provides:

Clear trend identification

Logical pullback entry zones

Intuitive stop-loss placement based on structure

This makes it a powerful addition to any trader's technical toolkit.