What are swing highs and swing lows?

How to spot it

A swing is a local turning point: a peak that price walked up to and then walked away from, or a trough it fell into and climbed out of. Every other smart money concept is anchored to one. Market structure compares swings, liquidity is said to rest beyond them, and a dealing range runs from one to another. If the swings are wrong, everything built on them is wrong.

The mechanical name for this pattern is a fractal. You choose a strength, which is the number of candles required on each side, and test each candle against its neighbours. With a strength of two the pattern is five candles wide, and the middle candle must stand clear of the other four.

Two details decide most disagreements. First, the comparison is strict: a neighbour with an equal high spoils the swing. Two candles with the same high form a flat top, a plateau, and neither is a swing high. Second, a swing does not exist until the candles after it have closed. You can only know a peak was a peak once price has moved away from it.

Step by step

1. Take a candidate candle and read its high.
2. Check the two candles to its left: both highs must be lower, not equal.
3. Check the two candles to its right: both highs must be lower, not equal.
4. Wait for the second candle to the right to close. Only then is the swing high confirmed.
5. For a swing low, repeat the test with lows: strictly below the two lows on each side.
6. Where two swing highs appear in a row with no swing low between them, keep the higher one, so highs and lows alternate.

Why confirmation matters

Because the rule needs two candles after the peak, every swing is known two candles late. That delay is the price of having a definition at all. A chart marked in hindsight looks as if the turning points were obvious, but in real time the most recent high is only a candidate until the second candle after it closes.

This matters for everything downstream. A break of structure is measured against the last confirmed swing, not against a high that might still be exceeded. When you replay a chart candle by candle, as the games do, you will notice how often the level you wanted to use did not exist yet.

Other rules you will meet

None of these is the correct one. They are settings. What matters is that you state the setting and apply it the same way on every chart.

• Three-candle swings (strength 1): one candle on each side. Faster, many more swings, much noisier structure.
• Larger strengths: three, five or more candles on each side. Fewer, more significant swings, known later.
• Wick or body: most rules, including this one, use the high and low of the candle. A few use the body only.
• Percentage or volatility zigzags: a turn counts once price has reversed by a set amount. A different idea that often marks similar points.

Worked example

On the simulated chart below, start with the plain candles. Scan for peaks and test each one against the rule: two lower highs on the left, two lower highs on the right. Do the same for troughs. Count how many you find before you open the Lens.

The Lens then shows which swings the rule kept. Pay attention to the candles you marked that the Lens did not. In nearly every case one of the four neighbours has an equal or higher high, or the candle sits beside a better swing of the same kind and lost its place when the sequence was made to alternate.

Reading the chart, step by step

1. The chart has 36 candles. The rule keeps 7 swings: 3 swing highs and 4 swing lows.
2. Candle 13 has a high of 193.248. The two highs before it are 193.161 and 193.199, and the two after it are 193.238 and 193.199. All four are lower, so candle 13 is a swing high. It is confirmed when candle 15 closes, not before.
3. Candle 8 has a low of 192.944. The two lows before it are 193.113 and 193.045, and the two after it are 192.954 and 192.979. All four are higher, so candle 8 is a swing low. It is confirmed when candle 10 closes, not before.
4. Every other marker on the Lens passes the same test. Candles that look like turning points but have an equal or more extreme neighbour within two candles are not swings.

These numbers come from the generated chart above. Change the seed and the prices change; the rule does not.

Takeaway: A swing is a five-candle fact, not an impression: strictly beyond two candles on each side, and known only after the second candle to the right has closed.

Common mistakes

• Counting equal highs as a swing. If a neighbour matches the high exactly, the rule sees a plateau and marks nothing. Flat tops are interesting for another reason, as equal highs, but they are not swing highs.
• Using a swing before it is confirmed. The newest peak on a live chart is a candidate. Until two candles have closed after it, price can still trade higher and erase it.
• Changing the rule mid-chart. Using three candles where it suits and five where it does not is curve fitting by hand. One strength per chart, per timeframe.
• Marking every fractal as significant. A swing that formed inside a tiny pullback is still a swing, but it carries less weight than the high of the week. Structure reads better when highs and lows alternate and minor duplicates are dropped.