Below is a trading strategy that combines the Zig Zag indicator and the Aroon indicator. This combination can help identify trends and potential reversal points.
Zig Zag and Aroon Strategy Overview
Zig Zag Indicator: The Zig Zag indicator helps to identify significant price movements and eliminates smaller fluctuations. It is useful for spotting trends and reversals.
Aroon Indicator: The Aroon indicator consists of two lines: Aroon Up and Aroon Down. It measures the time since the highest high and the lowest low over a specified period, indicating the strength of a trend. Strategy Conditions
Long Entry Conditions: Aroon Up crosses above Aroon Down (indicating a bullish trend). The Zig Zag indicator shows an upward movement (indicating a potential continuation).
Short Entry Conditions: Aroon Down crosses above Aroon Up (indicating a bearish trend). The Zig Zag indicator shows a downward movement (indicating a potential continuation).
Exit Conditions: Exit long when Aroon Down crosses above Aroon Up. Exit short when Aroon Up crosses above Aroon Down.