Price swings

Price Swings

What is price swing?

Types of Swings

How to identify impulsive

and corrective swing?

A price chart is a sequence of prices plotted over a

specific timeframe.

Price swings are formed on chart by group of candles

that share the same characteristics in direction and

strength.

What is a price swing?

Up Swing

(Bullish) Down Swing

(Bearish)

Swing High

Swing low

It takes one swing low and swing high to

make one swing leg.

Impulsive swings

• Quick in one direction

(trending)

• Sharp with strong trend

candles. Usually subdivides

into 3 or 5 waves. Impulsive

wave can also be 1 single

wave.

How to identify impulsive

swings?

• In a down impulsive swing,

majority (at least 60%) of the

candles are bearish

• close near their lows.

• Sequence of candles are

lower highs and lower lows.

Impulsive - Quick move.

Price change in less time

Price

Time

Corrective - Slow move.

Price change taking

more time

Impulsive

T y p e s o f S w i n g s – Impulsive and corrective

• Wave 2 should not go under wave 1

• Wave 3 should not be the shortest wave

• Wave 4 should not go to price territory of

wave 1

• Wave 2 and 4 should be similar in price and

time by at least 70%

More characteristics of impulsive waves

Types of Swings –Impulsive and corrective

Corrective swings

• Corrective swings are slow moving, indecisive and

sideways (showing both sides swings)

• They are both trending and non trending

• They are at least 3 waves

How to identify corrective swing?

• Candles are mixed (50-50): bullish, bearish, dojis.

• Most of candles close near the middle, lot of

indecision candles (dojis)

• No sequence of higher highs, higher lows or lower

highs lower lows

impulsive

corrective

• Smallest of swings in a chart

• Usually 2 candles to the left and 2 to the right

Swing high fractal

Fractals

A larger degree fractal will have smaller degree fractal inside it.

Fractals

Images