ZigZag Indicator Explained

ZigZag redraws price as its significant swings only: any move smaller than the threshold (percent or ATR-based) is ignored, and what remains is the skeleton — the legs a swing trader actually cares about. It is also the most infamous repainting indicator in existence, which bots must handle correctly.

How It Works

• A new pivot is confirmed only after price reverses by the threshold from an extreme.
• The final, in-progress leg keeps moving with price — that's the repaint.
• Confirmed pivots (all but the last) are fixed history and safe to trade on.

How to Trade It

Build rules on confirmed pivots only: leg-length statistics for projection targets, higher-high/higher-low sequences as trend state, and equal-swing measurements for harmonic or measured-move logic. Never condition on the live leg — that's the backtest lie that never survives live trading.

Building It in Setup.Cash

Add ZigZag in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. See Fractals for the fixed-width, non-repainting alternative. For the full category overview, see the market structure tools guide.

Structure tools define context; your entry logic supplies timing. Backtest both halves together before going live.