How do you identify a swing high and swing low?

Compare a candle with at least 2 candles on each side: if it is higher than all of them it is a swing high, if lower than all of them a swing low.

Is the fractal indicator the same as a swing point?

Essentially yes: the Williams fractal also uses the 2-candles-each-side rule. The difference is that the indicator marks every minor turn, while a trader picks only the significant ones.

Analysis

What is Swing high / swing low?

In short

A clear turning point on the chart: a swing high is a peak above the candles on both sides, a swing low a trough below them. A common rule is at least 2 candles on each side.

Also known as: swing, fractal, pivot, burilish nuqtasi

A swing point is a clear spot on the chart where price changed direction. A swing high is a peak above the candles before and after it; a swing low is a trough below the candles on both sides. The most common rule: at least 2 candles on the left and on the right (some platforms call this a "fractal").

Why it matters

Swing points are the skeleton of market structure. A series of higher highs (HH) and higher lows (HL) defines an uptrend; falling ones define a downtrend. A BOS and a CHoCH are identified precisely by swing points being broken. Stop-losses are often placed just below the last swing low.

Limitations

A swing point is confirmed with a delay: until the 2 candles on the right have closed, the peak is not yet a peak.
Timeframe matters: one swing on the daily chart contains dozens of small swings on the hourly.
Not every wiggle is a swing — mark the clear, obvious turns.

How to define a swing point

A swing high has at least 2 candles with lower highs on each side. The $103.9 peak is not a swing: the second candle after it took it out. The real swings: $104.6 → $106.6 (HH) and $100.2 → $102.9 (HL).

Example

Five daily candles of an illustrative stock:

Highs: $48 → $49.50 → $52 → $50.80 → $50. The $52 in the middle is above the 2 candles on each side, so it is a swing high. It is only confirmed when day 5 closes.
Lows in the following weeks: $44 → $43.20 → $42 → $42.90 → $43.50. $42 is a swing low.

Price then rallied to $55 (a new HH) and pulled back to $45 (a new HL, since $45 > $42). The structure is an uptrend. A trader might place a long position's stop just below the latest swing low, for example at $44.70. A close below $42 would break the structure.

Mistakes and tips

Don't mark a swing point before the candles on its right have closed — otherwise your "peak" may be exceeded by the very next candle.
Mark swings on the higher timeframe (daily, weekly) first; use the lower timeframe only to fine-tune the entry.
Put the stop a little beyond the swing low, not exactly on it: everyone sees that level and liquidity gathers there.

Frequently asked questions

How do you identify a swing high and swing low?: Compare a candle with at least 2 candles on each side: if it is higher than all of them it is a swing high, if lower than all of them a swing low.
Is the fractal indicator the same as a swing point?: Essentially yes: the Williams fractal also uses the 2-candles-each-side rule. The difference is that the indicator marks every minor turn, while a trader picks only the significant ones.

Learn it in the Academy

This term is covered with hands-on examples and a quiz in these lessons of the interactive course.

Market structure: swings, HH/HL, BOS and CHoCHHow to mark highs and lows by rule, read whether a trend continues or changes through BOS and CHoCH, and use structure for entries and stops.Open lesson · 11 min

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