A swing high is a candle whose high stands above the candles on both sides of it. A swing low is a candle whose low stands below the candles on both sides. These three blocks read them on the timeframe you name.
What a swing is, exactly
You choose how many candles must sit on each side of the swing. With two, a swing high is a candle whose high is above the highs of the two candles before it and the two after it.
- The swing must be strictly above (or below) every one of them. A neighbour at exactly the same price is a flat top, not a swing.
- A swing can only be known once the candles after it have closed. With two candles each side, a swing is confirmed two candles after it happened, never sooner.
The swing high or low block
This block fires on the close that confirms a swing. A swing low is a long and a swing high is a short. If one candle confirms a swing high and a swing low at the same time, there is no signal, because the candle states no single direction.
The break of a swing block
This block keeps the most recent swing high and the most recent swing low. It fires when a candle closes above the latest swing high (a long) or below the latest swing low (a short). A wick through does not count. Each swing can be broken once; after that, the block waits for the next swing to be confirmed.
The change of character block
This block reads the same breaks, and fires only on a break the other way to the one before it: the first break below a swing low after a break above a swing high, or the reverse. The very first break it sees does not fire, because there is nothing before it to change from.
Where the stop goes
- The pattern's extreme. On the swing block, the swing itself: the swing low for a long, the swing high for a short. On the two break blocks, the low or high of the candle that closed past the swing.
- The latest swing on the other side (the two break blocks only). For a long, the most recent swing low that has not been broken. If there is none, the signal is not traded.
- A swing window. The lowest low or highest high of a number of candles you state.
You can add a buffer of ticks beyond any of them.
What can go wrong
A block with more candles each side confirms fewer swings, and confirms each one later. If signals seem late, that is why: the block is waiting for the candles after the swing to close.
A swing on one timeframe is often not a swing on another, so check the timeframe on the block.
What's next
Equal highs and lows, liquidity sweeps, order blocks and breaker blocks.