Which one of these do you like the most to trade?
Oh, you don't know the difference sometimes?
Don't worry, you're not the only one, period.
But let's fix that right now.
Let's start with the Pendulum Swing or...
...nope, let's start with CONTEXT.
Whenever you research something new, you need to have a context.
The context enables you to compare the new information to the surrounding system.
Let's see what I mean:
If I say, I have to put context to the new information, then this means that we just take a snapshot of a chart. We just take a certain timeframe and analyse what we have.
The result will be information in context of the current big picture.
So this is our context.
To identify all the different type of movements, we need a rule.
The rule I really like to teach as much as possible goes like this:
A Low Is Confirmed
When The Last High Is Broken
Let's see what exactly this means:
On the other side, if we look for a down moving market, then we flip the rule:
A High Is Confirmed
When The Last Low Is Broken
So now we have a rule on hand we can work with, instead of guessing what is a Swing, what is a Pivot etcetera.
We are able to identify the
Let's go back to our context, our chart and identify just what we would judge as the biggest swings on the board:
Would you agree that these are the biggest Swings, which we could call "Pendulum-Swings"? If so, then let's proceed to the next level, to the Swings, and use the same rule to identify them:
OK, there we have'm.
We already have the Pendulum-Swings and the Swings.
Let's continue with the Pivots.
Again, I zoom in a little bit more:
Usually the more granular we get, the more complex it will become.
But with our simple rules to identify the real Swing and Pivots, this task becomes very simple as you see.
And here's a fantastic trick you can use, to take out all the noise and to put the whole puzzle into a High-Resolution picture of the Market: Just Turn Off The Bars!
And here you have it, the Market in it's whole beauty of Pendulum-Swings (orange), Swings (yellow) and Pivots (magenta).
Do you have any ideas how you can use this information in your trading?
How about this:
And guess what?
This was only a scratching on the surface.
As a member (either Monthly or Annual), you will get so much more information about how to improve your trading.
If you want to become a profitable trader, then you should add to your current knowledge and maybe even throw some of it out the window...
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I wish you a successful trading and feel free to share this post on FB and other SOM channels, than you!