A novel nonzero-order joint transform correlator system with the Mach-Zehnder configuration for polychromatic pattern recognition is presented. To remove zero order term is a very important thing for optical pattern recognition. We cleverly utilize the Stokes relations to remove the large zero order term directly in only one step in this structure. In the proposed technique, we investigate color pattern recognition with YIQ channels involving in-plane distortion such as rotations. Furthermore, the utilization of minimum average correlation energy to generate the composite reference image for enhancing the correlation output is also studied. The computer simulation results are presented to show the validity of the proposed technique.