The very first thing that we wish to know is what’s a Swing High and Swing Low. That is almost certainly the very best a part of price action and bar counting even supposing the entire course of will get more uncomplicated with follow.
We outline a swing high as;
A 3 bar mixture
A bar preceded and succeeded via lower highs
I outline a swing low as;
A 3 bar mixture
A bar preceded and succeeded by using higher lows
Market LevelsThere are most effective 3 ways the market can go;
With the swing high/low definition now in thoughts we will begin to construct some layers on to the chart to establish these market phases and begin to do a easy depend of those swing highs and lows.
• The market goes up when value is making higher highs and higher lows
• The market goes down when value is making lower highs and lower lows
• The market goes sideways when worth is just not making higher highs and higher lows OR lower highs lower lows
This may increasingly sound like kid’s play and a commentary of the apparent however you are going to be stunned at how frequently folks will overlook these easy data. One of the vital greatest questions I get requested is, which method is the market going? Through doing a easy train you will discover which approach that worth goes and come to a decision for your trading plan and extra importantly timing of a trade.
What do I imply by means of timing? It can be that you’re on the lookout for a shorting chance as the general trend is down however value to your entry period of time continues to be going up (making HH’s & HL’s). There’s, at this stage, no level in seeking to quick a rising market except price action begin to level down (making LH’s & LL’s. Extra on this rapidly).
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Indrajit is a professional blogger and trading system developer. Amibroker expert, Wordpress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely.