Swing High and Swing Low Indicator Guide
The Swing low swing high indicator MT4, also known as the “Valid Swing High Low Indicator,” functions as a technical analysis indicator for detecting High swings and low swings actively.
In fact, it identifies specified chart patterns that may appear on any timeframe. Furthermore, the Swing low swing high indicator Tradingview actively operates on any asset publicly traded on any market worldwide. This article aims to demonstrate the indicator’s significance, which is available on MetaTrader 4 (MT4), MetaTrader 5 (MT5), and Tradingview.
Swing High & Swing Low Indicator FAQ
What is Swing Low Swing High?
Traders use Swing Low as a technical analysis term to describe a chart pattern. The chart Pattern where the price of the asset falls below the most recently recorded low price. The typical lookback period actively equals 20 trading days. The pattern emerges when the current low actively becomes lower than any value recorded in the previous 20 days. Furthermore, the pattern actively resembles descending stairs.
Similarly, Swing High is another pattern used in technical analysis that forms actively when the current highest price exceeds the highest price in the last 20 trading days. It actively appears like ascending stairs and becomes useful when traders try to identify trends.
Therefore, traders use the Swing Low Swing High indicator actively to detect these patterns, enabling them to predict market movements. In other words, the indicator actively aids in identifying potential trend reversals by actively determining areas of support and resistance.
How does a Swing Low Swing High Indicator Work?The Swing Low Swing High indicator detects some specific patterns and sets resistance and support levels based on each pattern. it sets the resistance level when the current high is higher than the highest high in the last 20 trading days. As for the support level, it is set when the current low is lower than the lowest low recorded in the past 20 trading days.
What are the benefits of using this indicator?
The Swing low swing high indicator is a very useful tool in the technical analysis field. Some of the key advantages of using the swing low swing high indicator are:
- Identifying support and resistance levels on each occurrence of one of the two patterns. In fact, the indicator allows users to detect significant support and resistance levels on the chart. And these levels are crucial in making entry or exit decisions.
- Identifying the current and upcoming trends which are detected after analyzing the indicator’s output.
- Setting exit points using the stop-loss orders. In fact, the trader can use the swing low swing high indicator to detect support levels which could be used as stop-loss reference points. By using this technique, traders can avoid losses and at the same time realize a profit from speculating on the observed asset.
How to interpret Swing Lows and Highs?The swing low swing high indicator accurately detects resistance and support levels. Those levels are based on the recent 20 days of trading and actively traces them on the chart to indicate price movement. Green resistance and support level lines indicate an upcoming uptrend and price increase. Conversely, red support and resistance levels may suggest a price decline, prompting investors to either exit their current position or go short on the asset.
However, beginners may not find the indicator recommended due to its complexity in understanding and interpreting. Therefore, we advise using it in combination with another technical indicator for confirmation.
In some cases, market movements can be unpredictable. The users should seek confirmation from another indicator or look for a confirming pattern. The swing low swing high indicator is built by comparing the current price to the recorded prices in the last 20 days and does not take into consideration other aspects such as the asset’s volatility.
Download Swing Highs and Swing Lows Indicator for MT4
The Swing Low Swing High indicator MT4 detects chart patterns of high swings and low swings in prices. It’s sets accordingly resistance and support levels for each price movement. In the following example, we apply the swing low swing high indicator to the Euro vs. USD 1-hour chart. The following information could be extracted:
- For each of the 5 periods, the stop-loss order could be set based on the lowest price support level.
- Before period 1, the price made a significant jump for which the indicator could not determine a support and resistance level.
- Before period 1, a long-position investor could have bought the asset once the price broke through the resistance level. Which indicated the appearance of a swing high pattern which in turn indicates
- Also, between periods 4 and 5, the price broke through the resistance level forming another swing-high pattern which could have been a golden opportunity to generate an enormous profit from a long position.
Download Swing Highs and Swing Lows Indicator for MT5
The swing low swing high indicator MT5 is a similar version to the indicator available for the MetaTrader 5. It offers the same functionalities and the same graphical interface. The following example is taken from the USD vs Japanese Yen chart with the swing low swing high indicator MT5 applied to it.
As displayed in the picture, the indicator has detected 2 consecutive swing-high patterns. The first pattern appeared when the price broke through the resistance level at point 1. It was a series of consecutive bullish candles for which the price was very volatile.
The second swing-high pattern appeared at point 2 where another series of consecutive bullish candlesticks appeared. During that period, the price broke through the resistance level again. This means that are both cases, the current high back then is higher than the highest recorded price over the previous period.
Download Swing Highs and Swing Lows Indicator for TradingviewThe Swing Low Swing High indicator on Tradingview is also similar to its versions available for MetaTrader 4 and MetaTrader 5. The indicator actively displays support and resistance levels while indicating occurrences of swing high or swing low. The following example shows the indicator applied to a tradingview platform.
The indicator actively identified several swing-high and swing-low patterns, with some being minors. We will focus on the 2 major patterns and provide an explanation for each.
The first major pattern represents a swing-low, which occurred when the price broke through the support level, leading to a downtrend. Shortly after, the swing high pattern emerged, indicating that the asset was oversold, and the price was going to increase as it broke through the resistance level.
The first major pattern is a swing-low, which occurs when the price breaks through the support level, leading to a downtrend. Shortly after, the swing high pattern emerges, indicating that the asset is oversold, and the price is going to increase as it breaks through the resistance level.
- Traders use the Swing Low Swing High is one of the most popular Metatrader indicators. It detects patterns that compare the current price with the maximum or minimum recorded over the last “n” period.
- Swing low patterns occur when the current price falls below the lowest price recorded over the “n” previous period.
- On the contrary, Swing high patterns appear when the current price exceeds the highest price recorded over the last “n” periods.
- While the indicator is accurate, traders may find it challenging to use. Therefore, we recommend combining it with another indicator that can confirm the trend.
- The typical look-back period actively consists of 20 trading days, but users can customize it to suit their preferences.