The ZigZag AutoChannel represents a combination of auto Zig_Zag and price channel indicator for the MT4 platform.

Both ZigZag and price channel are heavily used by the market experts for technical analysis of the forex currency pairs. The ZigZag indicator works on identifying market trend. On the other hand, a price channel reveals the hidden support and resistance of the price based on the highs and lows of the market.

The primary goal of the ZigZag AutoChannel indicator is to help traders in finding the correct trend and the best possible level for placing an order. Besides, you may code and develop your own MT4 ZigZag Expert_Advisor (EA) based on the formation and trading rules of the indicator.

According to our review, the ZigZag AutoChannel indicator offers a simple demonstration of chart signals. Besides, it is compatible with all the timeframes available on the MT4 platform. Such flexibility allows you to apply this it for both scalping and intraday trading purposes.

How to trade using the ZigZag AutoChannel indicator in the MT4 platform?

In this chart, the red line across the price candles represents the ZigZag line that points the direction of the current market trend. The ZigZag line changes its direction whenever it spots a significant reverse of the price.

The lines in yellow color connect the recent highs and lows of the price for creating an auto price channel. The lower line works as support and the higher one as resistance. Besides trendline support and resistance, the auto channel also detects triangle patterns. When the price roams inside the channel, use the trendline S/Rs for determining the trade-entry levels. If the price comes out of the channel then we consider it as a potential price breakout.

So, before placing an order, we’ll identify the market trend by using the ZigZag lines. Next, we’ll assess the trade entry levels based on the trendline positions of the auto channel.

Here are the trading rules of ZigZag AutoChannel:

Trading inside the auto channel area

• Buy: When the ZigZag line is up and the price bounces upwards from the channel support
• Sell: When the ZigZag line is down and the price rebounds downwards from the channel resistance

Trading outside the auto channel area

• Buy: When the ZigZag line is up and the price breaks the channel resistance
• Sell: When the ZigZag line is down and the price breaks the channel support

Conclusion

The ZigZag AutoChannel indicator reflects a good balance between the trend and the level for assessing potential trade setups. Apart from forex currency pairs, it also works on stocks, futures, and cryptocurrency charts. Besides, it is compatible with MT4 ZigZag EA that allows you to carry on auto trading based on ZigZag trend signals. According to our review, the ZigZag AutoChannel is one of the best and simplest trend-following trading tools for beginners.