SWING HIGH, SWING LOW
A Swing High, Swing Low (SHSL) is a piece of price action where multiple candlesticks, or bars, are grouped together. They are considered to be part of one move in a certain direction. The Swing High, Swing Low movement is commonly referred to as a leg, a ‘move,’ or simply a swing. We call this a “swing” because it’s one piece of the price action in a certain direction. It is always followed by a swing in the opposite direction OR a sideways move.
If it’s followed by movement in the same direction, it would be a continuous part of the same swing. Price “swings” back and forth in the market, which is where the name is derived from. The Swing High is, of course, the highest price of the given move. Likewise, the Swing Low is the lowest price of the given move. Here is a strategy you can read about and it's called the risk to reward ratio.
Identifying Swings, correctly.
When the market makes two consecutive higher highs and higher lows, or two consecutive lower lows and lower highs, it is considered a swing. Swings come in all different shapes and sizes. You can identify all of them by using the simple rule about consecutive higher highs and higher lows, or vice-versa. Like most things in trading, the easiest way to get a handle on this is to view examples. Remember, we’ll have an exercise at the end to make sure you understand this properly. Here, you can see a typical Bullish Swing. Notice that we have two consecutive higher highs and higher lows: