Not many spread betting platforms offer the ZIGZAG, but if you find it it does help in your analysis and projection. Example many Elliot wave chartists could use the ZigZag line to filter out noise when doing their count. The ZigZag settings to be applied is subjective o the individual doing the count, and how sensitive his count is to the price action.
As you can see from the chart above we have used the ZigZag Line to filter out just then main movements.
Filtering out Support and Resistance:
In the S&P 500 spread betting example, the Zig Zag line has filtered out support and resistance. We have used a 5% filter, therefore only when the spreadbetting price moves more than 5% will it determine important areas of price reversal or price continuation. Below I have pointed out the break of support.
After the price found new support it started forming an ascending channel that was eventually broken to the downside and the support line became new resistance.
as you can see the ZigZag Line has helped also identify patterns. as in this case and ascending channel.
to see how effective the ZigZag line is, look to the left of the triple top pattern. Can you see how effective the ZigZag Line was in maintaining you in a long spreadtrade, which would have allowed you to run your trade all the way to the top of the first peak.
In Conclusion. The Zig Zag Indicator is effective to help you identify chart patterns, support and resistance areas and help you stay in the path of the main trend.