Swing Points & Trend Identification
Swing points are the anchor points of institutional decision-making. Every order block, every liquidity pool, every BOS starts at a swing point. You must be able to identify them instantly.
Defining Swing Points
Swing High: A candle whose high is the highest of at least 2-3 candles on both sides.
Swing Low: A candle whose low is the lowest of at least 2-3 candles on both sides.
[SH] [SH]
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[SL]Strong vs Weak Swing Points
This distinction separates amateur from professional structure reading.
| Type | Characteristics | What It Means |
|---|---|---|
| Strong High | Created by impulsive move, deep retracement followed | Institutions placed orders here — it will be protected |
| Weak High | Created on low momentum, shallow pullback | Likely to be taken out — potential liquidity target |
| Strong Low | Explosive move up from this level, deep retracement | Institutions defended this — key support |
| Weak Low | Low momentum bounce, shallow rally | Will be swept — good sell-side liquidity target |
Real Example — XAU/USD 4H
Strong Low: 2,285 — formed after a 3.2% impulsive rally (Daily bullish OB) Weak Low: 2,301 — formed after a slow grind, shallow bounce Institutions swept the weak low at 2,301 first (stop hunt) Then price held the strong low at 2,285 perfectly and launched higher
Trend Identification Framework
Use this exact process before every trade:
Step 1 — Daily Chart (Macro Bias)
- Is price making HH/HL or LH/LL?
- This determines your directional bias for the week
Step 2 — 4H Chart (Intraday Trend)
- Confirm the structure aligns with Daily
- Identify the most recent swing high/low
- Which side is most likely to be swept next?
Step 3 — 1H/15m (Entry Timeframe)
- Wait for CHoCH or BOS on the entry timeframe
- Confirm with an order block or FVG
- Only enter in the direction of 4H and Daily bias
Real Multi-Timeframe Trade — EUR/USD
Daily: Bullish structure (HH at 1.1050, holding HL at 1.0880) 4H: Price retracing into 4H HL zone (1.0920–1.0930) 1H: CHoCH to the upside just confirmed at 1.0925
Entry: 1.0928 Stop Loss: 1.0905 (below the 1H swing low) Target 1: 1.0980 (internal liquidity) Target 2: 1.1050 (Daily HH buy-side liquidity) R:R = 1:5.5 (partial profits at T1, runner to T2)
Ranging Markets (Consolidation)
When neither the swing high nor the swing low is breaking:
- Do not force a trade
- Mark the range high and low as liquidity pools
- Wait for price to sweep one side → this creates the next directional move
- The sweep of the range = the AMD manipulation phase
Homework
- On any pair, identify 5 strong swing highs/lows and 5 weak ones
- Write one sentence per swing point explaining WHY it's strong or weak
- This trains the pattern recognition that makes everything else in SMC click