Swing highs and swing lows

The bones of every chart

Every trend, every BoS, every ChoCH you've learned so far is built out of two simple pieces: swing highs and swing lows. They're the bones underneath everything. If you can't identify them cleanly, you can't apply any of the structure rules. So let's lock the definitions.

A swing high is a candle where the high is taller than the high of the candle directly before it AND the high of the candle directly after it. Picture a single peak with two shorter candles on either side. A swing low is the mirror: a candle where the low is below the lows of the candles on either side. A single valley flanked by shallower lows.

Now the catch new traders miss: swings are timeframe-dependent. A swing high on a 5-minute chart is often invisible on a 1-hour chart — it just gets absorbed into one bigger candle. That's not a bug, it's the structure of the markets. Every timeframe has its own swings, and they nest inside each other like Russian dolls. We'll dedicate the next lesson to this idea.

Why this matters for your $500 account: most of the bad trade entries you'll ever see come from misidentifying swings. A trader sees one small candle dip below another and thinks they have a swing low — they go long, the actual swing low forms 10 candles later 50 pips lower, and they're stopped out. The fix is simple: use the stricter 2-candle rule, slow down, and confirm the swing actually formed before treating it as one.

A subtle but important point: swings only confirm AFTER the flanking candles print. The 2-candle rule means the swing isn't 'official' until two candles have closed on each side. In live trading, this means you can never know in real time that the current candle is THE swing — you only know in retrospect, after the confirming candles have formed. That's the reason patient entries beat impatient ones: you're entering on a confirmed swing, not a guess.

Side note that pays off later: some traders distinguish between 'minor' swings (formed quickly with shallow pullbacks) and 'major' swings (formed with deep pullbacks and longer time). Major swings carry more weight for structural decisions — they're the levels where the next BoS or ChoCH actually matters. Train your eye to spot the major ones; the minor wiggles can be filtered out as noise.

Recap: swing high = a peak with lower neighbors on both sides. Swing low = a valley with higher neighbors on both sides. Use the 2-candle rule for trade decisions. Every other structure concept builds on these.