Identifying Three-Bar Swing Highs and Swing Lows
Summary
The document defines a swing high or low by comparing a middle bar with the bars immediately before and after it. A swing high occurs when both the middle bar’s high and low exceed the corresponding values of both neighboring bars. A swing low occurs when both are lower. Its indicator marks these patterns with separate positive and negative outputs, while leaving other bars unmarked.
Because the middle bar can only be confirmed after the following bar is available, the pattern is inherently delayed by one bar. The document supplies the definitions and indicator logic but no trading rules, market examples, or performance tests. Swing points can help describe local turning points, but they do not establish that a reversal will follow or specify how to manage a position.
Key ideas
- A swing high requires the middle bar’s high and low to exceed those of both adjacent bars.
- A swing low requires the middle bar’s high and low to be below those of both adjacent bars.
- The pattern is confirmed only after the bar following the candidate point has formed.
- The document does not test whether identified swing points predict profitable trades.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.