🔹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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