ZigZag & Fibonacci (+MACD) Strategy

A pragmatic confluence method: read swing structure with ZigZag, measure Fibonacci pullbacks, and confirm momentum with MACD.

Tools

• ZigZag: default or moderate depth to reveal major swings.
• Fibonacci Retracement: 38.2%, 50%, 61.8% levels.
• MACD: 12-26-9 (histogram/momentum filter).
• Optional: ATR(14) for stop distance and sizing.

Market logic

• Identify the impulse leg (HH/HL for uptrend or LL/LH for downtrend) with ZigZag.
• Expect a pullback into the Fib zone (38.2–61.8). Momentum confirmation reduces false starts.

Entry rules

1. Mark the latest impulse with ZigZag.
2. Draw Fib from swing low→high (uptrend) or high→low (downtrend).
3. Watch for entry when price pulls back into 50%–61.8% and MACD aligns with trend (histogram returns to trend side or crosses zero).

Stop Loss

• Below/above the swing extreme (beyond 78.6%).
• ATR-based alternative: ATR(14) × 1.5–2.0 from entry.

Take Profit

Choose and keep one approach:

• R-multiple: 2R or 3R.
• Structure: partials at prior swing high/low; trail remainder under/over higher lows/highs.
• Extension: use Fib 127%/161.8% of the impulse.

Management

• Move SL to breakeven after a close through prior micro-structure or when MACD makes a second push in trend direction.
• Skip trades into major S/R or pre-news (1 hour). Trade best during London/NY overlap.

Risk

• Risk ≤ 1% per trade, max 3 simultaneous per pair.
• Align with H4/D1 bias. Backtest → forward-test → live.