🔹Price Swings

What are Price Swings?

A price chart is a sequence of prices plotted over a specific timeframe. Price swings are formed on the chart by a group of candles that share the same characteristics in direction and strength.

Types of Swings – Impulsive and Corrective

the Impulsive swings

• Quick in one direction (trending) Sharp with strong trend candles.

• Usually subdivides into 3 or 5 waves. An impulsive wave can also be 1 single wave.

How to identify impulsive swings?

• In a down impulsive swing, the majority (at least 60%) of the candles are bearish

• close near their lows.

• The sequence of candles is lower highs and lower lows.

More Characteristics of Impulsive Waves

• Wave 2 should not go under Wave 1

• Wave 3 should not be the shortest wave

• Wave 4 should not go to the price territory of Wave 1

• Wave 2 and 4 should be similar in price and time by at least 70%

Corrective Swings

• Corrective swings are slow-moving, indecisive and sideways (showing both sides of swings)

• They are both trending and non-trending

• They are at least 3 waves

How to identify corrective swings?

• 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

Fractals

• Smallest of swings in a chart

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

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

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