Framework
Framework
Lesson 1 : Relevant Swings
Lesson 1 : Relevant Swings
Lesson 1 : Relevant Swings
Beginner
Beginner
Beginner
12 min
12 min
12 min
Relevant Swing Logic
Relevant Swing Logic
Relevant Swing Logic
What is a relevant swing? Relevant swings are the starting point to all opportunity in the charts. At its core, a relevant swing is defined as a high or low that forms at the extreme of the market. These areas stand out because there is no surrounding structure in close proximity, which makes the market’s reaction to them highly meaningful. When price engages with these levels, the outcome provides clear information about direction and intent.
What is a relevant swing? Relevant swings are the starting point to all opportunity in the charts. At its core, a relevant swing is defined as a high or low that forms at the extreme of the market. These areas stand out because there is no surrounding structure in close proximity, which makes the market’s reaction to them highly meaningful. When price engages with these levels, the outcome provides clear information about direction and intent.
What is a relevant swing? Relevant swings are the starting point to all opportunity in the charts. At its core, a relevant swing is defined as a high or low that forms at the extreme of the market. These areas stand out because there is no surrounding structure in close proximity, which makes the market’s reaction to them highly meaningful. When price engages with these levels, the outcome provides clear information about direction and intent.
The same logic can be applied across different timeframes, but the identification of relevant swings is anchored on the daily chart. The daily chart is the most important timeframe and it sets the higher timeframe direction. All decisions made on lower timeframes must align with the direction established by the daily.
The same logic can be applied across different timeframes, but the identification of relevant swings is anchored on the daily chart. The daily chart is the most important timeframe and it sets the higher timeframe direction. All decisions made on lower timeframes must align with the direction established by the daily.
The same logic can be applied across different timeframes, but the identification of relevant swings is anchored on the daily chart. The daily chart is the most important timeframe and it sets the higher timeframe direction. All decisions made on lower timeframes must align with the direction established by the daily.
Using Failure Swings
Using Failure Swings
Using Failure Swings
This logic in the charts is achieved by understanding failure swings and applying a set of filters. Because failure swings are a core element in identifying relevant swings, the Price Signatures course is a required prerequisite before taking this lesson.
This logic in the charts is achieved by understanding failure swings and applying a set of filters. Because failure swings are a core element in identifying relevant swings, the Price Signatures course is a required prerequisite before taking this lesson.
This logic in the charts is achieved by understanding failure swings and applying a set of filters. Because failure swings are a core element in identifying relevant swings, the Price Signatures course is a required prerequisite before taking this lesson.
Failure swing lows: The focus remains on the initial lowest low. All following lows that trade deep back down into the initial low are ignored and considered irrelevant.
Failure swing lows: The focus remains on the initial lowest low. All following lows that trade deep back down into the initial low are ignored and considered irrelevant.
Failure swing lows: The focus remains on the initial lowest low. All following lows that trade deep back down into the initial low are ignored and considered irrelevant.
Failure swing highs: The focus remains on the initial highest high. All following highs that trade deep back up into the initial high are ignored and considered irrelevant.
Failure swing highs: The focus remains on the initial highest high. All following highs that trade deep back up into the initial high are ignored and considered irrelevant.
Failure swing highs: The focus remains on the initial highest high. All following highs that trade deep back up into the initial high are ignored and considered irrelevant.
Understanding Relevant Swings
Understanding Relevant Swings
Understanding Relevant Swings
With the definition of failure swings in place, the concept of relevant swings should begin to come together. A relevant swing is any swing high or swing low on the daily timeframe that is not a failure swing to another daily high or low positioned to the left.
With the definition of failure swings in place, the concept of relevant swings should begin to come together. A relevant swing is any swing high or swing low on the daily timeframe that is not a failure swing to another daily high or low positioned to the left.
With the definition of failure swings in place, the concept of relevant swings should begin to come together. A relevant swing is any swing high or swing low on the daily timeframe that is not a failure swing to another daily high or low positioned to the left.
Failure swings form in close proximity to other highs or lows, which creates uncertainty about which level carries true significance. Relevant swings form at the extremes. They exist outside the relative proximity of any other highs or lows to the left, which removes that uncertainty and allows for clear and confident selection.
Failure swings form in close proximity to other highs or lows, which creates uncertainty about which level carries true significance. Relevant swings form at the extremes. They exist outside the relative proximity of any other highs or lows to the left, which removes that uncertainty and allows for clear and confident selection.
Failure swings form in close proximity to other highs or lows, which creates uncertainty about which level carries true significance. Relevant swings form at the extremes. They exist outside the relative proximity of any other highs or lows to the left, which removes that uncertainty and allows for clear and confident selection.
Valid Separation
Valid Separation
Valid Separation
There is one more element required to ensure this logic holds across all scenarios. That element is valid separation between one relevant swing and the next.
There is one more element required to ensure this logic holds across all scenarios. That element is valid separation between one relevant swing and the next.
There is one more element required to ensure this logic holds across all scenarios. That element is valid separation between one relevant swing and the next.
The image below displays an example of valid separation. There is enough distance between both relevant swings for them to be considered independent.
The image below displays an example of valid separation. There is enough distance between both relevant swings for them to be considered independent.
The image below displays an example of valid separation. There is enough distance between both relevant swings for them to be considered independent.
Why does this separation matter? It ties directly back to the concept of failure swings and how participation is managed around them.
Why does this separation matter? It ties directly back to the concept of failure swings and how participation is managed around them.
Why does this separation matter? It ties directly back to the concept of failure swings and how participation is managed around them.
When price engages with a relevant swing that has valid separation from the next, failure swings do not form. This allows participation at the reaction of these levels, which is the exact purpose of identifying them.
When price engages with a relevant swing that has valid separation from the next, failure swings do not form. This allows participation at the reaction of these levels, which is the exact purpose of identifying them.
When price engages with a relevant swing that has valid separation from the next, failure swings do not form. This allows participation at the reaction of these levels, which is the exact purpose of identifying them.
Invalid Separation
Invalid Separation
Invalid Separation
The image below displays an example of invalid separation between two relevant swings. In this case, there is not enough distance between the swings to consider them independent of one another.
The image below displays an example of invalid separation between two relevant swings. In this case, there is not enough distance between the swings to consider them independent of one another.
The image below displays an example of invalid separation between two relevant swings. In this case, there is not enough distance between the swings to consider them independent of one another.
How do we determine what amount of separation is sufficient? The answer goes back to understanding how failure swings form and the role they play in filtering which swings truly matter.
How do we determine what amount of separation is sufficient? The answer goes back to understanding how failure swings form and the role they play in filtering which swings truly matter.
How do we determine what amount of separation is sufficient? The answer goes back to understanding how failure swings form and the role they play in filtering which swings truly matter.
The separation between the two swings is invalid because once price engages one, it becomes a failure swing to the next. In these cases, the lower low is considered the relevant low and the higher high is considered the relevant high, since the focus must remain on the extremes.
The separation between the two swings is invalid because once price engages one, it becomes a failure swing to the next. In these cases, the lower low is considered the relevant low and the higher high is considered the relevant high, since the focus must remain on the extremes.
The separation between the two swings is invalid because once price engages one, it becomes a failure swing to the next. In these cases, the lower low is considered the relevant low and the higher high is considered the relevant high, since the focus must remain on the extremes.
30-Day Lookback Period
30-Day Lookback Period
30-Day Lookback Period
When identifying relevant swings on the daily timeframe, the lookback is limited to a maximum of 30 daily candles. Any price action outside of this window is not considered. This rule forces the focus to remain on recent market signatures, which is essential when looking to capitalize on short-term moves.
When identifying relevant swings on the daily timeframe, the lookback is limited to a maximum of 30 daily candles. Any price action outside of this window is not considered. This rule forces the focus to remain on recent market signatures, which is essential when looking to capitalize on short-term moves.
When identifying relevant swings on the daily timeframe, the lookback is limited to a maximum of 30 daily candles. Any price action outside of this window is not considered. This rule forces the focus to remain on recent market signatures, which is essential when looking to capitalize on short-term moves.
Relevant Swing Reactions
Relevant Swing Reactions
Relevant Swing Reactions
With the knowledge of what relevant swings are, how to identify them, and where to look, the next step is to understand how price reacts at these levels and what those reactions mean. There are two specific reactions that provide context for what the market should do going forward.
With the knowledge of what relevant swings are, how to identify them, and where to look, the next step is to understand how price reacts at these levels and what those reactions mean. There are two specific reactions that provide context for what the market should do going forward.
With the knowledge of what relevant swings are, how to identify them, and where to look, the next step is to understand how price reacts at these levels and what those reactions mean. There are two specific reactions that provide context for what the market should do going forward.
Deep close through: When the daily candle closes deep through the relevant swing.
Deep close through: When the daily candle closes deep through the relevant swing.
Deep close through: When the daily candle closes deep through the relevant swing.
Candle wick: When the daily candle forms a wick at the relevant swing.
Candle wick: When the daily candle forms a wick at the relevant swing.
Candle wick: When the daily candle forms a wick at the relevant swing.
Breakout
Breakout
Breakout
When a daily candle has a deep close through a relevant swing, it signals that continuation through that level will take place. This reaction is defined as a failure to manipulate.
When a daily candle has a deep close through a relevant swing, it signals that continuation through that level will take place. This reaction is defined as a failure to manipulate.
When a daily candle has a deep close through a relevant swing, it signals that continuation through that level will take place. This reaction is defined as a failure to manipulate.
Manipulation
Manipulation
Manipulation
When a daily candle forms a wick at a relevant swing, it signals that price is reversing off that level. This reaction is defined as manipulation and it is the ideal outcome to seek. Manipulation creates a defined area in the market to trade away from and provides the framework for expansion in the following days.
When a daily candle forms a wick at a relevant swing, it signals that price is reversing off that level. This reaction is defined as manipulation and it is the ideal outcome to seek. Manipulation creates a defined area in the market to trade away from and provides the framework for expansion in the following days.
When a daily candle forms a wick at a relevant swing, it signals that price is reversing off that level. This reaction is defined as manipulation and it is the ideal outcome to seek. Manipulation creates a defined area in the market to trade away from and provides the framework for expansion in the following days.
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The standard for trading education and guidance
2025 The Market Lens - All Rights Reserved
The standard for trading education and guidance