Lesson 1 of 7 · 9 min
Swing highs and swing lows
Mark swing highs and lows with a fixed "N candles on each side" rule, so you label the same chart the same way every time.
By the end you'll be able to
- Define a swing high and a swing low with a fixed N-candle rule
- Mark swing points consistently, including the newest ones that are not yet confirmed
- Explain how the choice of N changes how many swings you see and how late each is confirmed
Free course
Enrol in “Market Structure: Swings, Zones and Liquidity” to start this lesson
Enrolling is free. Your progress, quiz scores and certificate are kept in your account, on every device.
- 7 short lessons with quizzes and interactive tools
- Lesson videos for members
- A certificate when you finish
Two traders open the same EUR/USD chart. One counts four swing highs, the other seven. Neither is wrong, because neither wrote down what a swing high is.
A rule you can repeat
Illustrative EUR/USD H1. One candle checked against the rule: two candles on each side.
A swing high is a candle whose high is above the highs of the N candles on each side of it. A swing low is a candle whose low is below the lows of the N candles on each side. N is a number you choose once and keep. With N = 2 you are looking at five candles: the middle one and two either side. Some charting tools call this five-candle pattern a fractal.
Write down three details as well, because each one changes the marks:
- Highs and lows, not closes. Use the wick ends.
- Ties do not count. If a neighbour’s high equals the candle’s high, it is not a swing high. Pick one convention and keep it.
- One timeframe at a time. A swing on H1 may be invisible on D1.
A swing is only known later
Look again at the chart. Candle 8 is a swing high, but you can only say so once candle 10 has closed. Until then, candle 9 or 10 could have made a higher high. With N = 2 every swing is confirmed two candles late. On H1 that is two hours; on D1 it is two days.
The newest candles on any chart are therefore unconfirmed. If the last candle is the highest of the last three, it might become a swing high, or it might be the middle of a move that keeps going.
How N changes the picture
A small N marks more swings. They are confirmed sooner, and more of them are noise: small wiggles inside a move. A larger N marks fewer, bigger swings, each confirmed later. On the chart below, the same 23 candles give 9 swing points with N = 1, 8 with N = 2 and 4 with N = 3.
There is no correct N. N = 2 is a common default and the one this course uses. Fix the number before you look, so the chart cannot talk you into the swings you would like to see.
Try it
Tap a candle, or step with the arrows. Each answer is checked against the rule. Triangles mark the swing points you have found.
Step through every candle with N = 2, then switch to 3 candles each side and see which swings survive and why the last few candles can no longer be confirmed.
Quick check
Quick check
Question 1 of 4
With N = 2, what makes a candle a swing high?
Question 2 of 4
The last candle on your H1 chart has the highest high of the past ten hours. Is it a swing high under N = 2?
Question 3 of 4
You switch from N = 2 to N = 3. What usually happens?
Question 4 of 4
Two neighbouring candles have exactly the same high of 1.0850. Under this course's convention, is either a swing high?
Go deeper: How to Identify a Trend: Highs, Lows and Market Structure · Price Action Trading: Reading the Market Without Indicators · Lesson: Trends