A swing in plain words — three candles and one comparison

A swing is counted, not guessed. Take three candles in a row: if the middle one has a low below both of its neighbours, that is it — the lower kind. Upside is the same, only by the high. There is no judging by eye here; there is one comparison.

The next thing is what it is for. Behind it lies liquidity — the orders of those who get out of the market if price reaches them. That is why price goes there: there is something to take.

Why some matter more than others

There are many such points on a chart, and almost all of them are weak — in the impulse and in the correction alike. The place decides nothing: a weak one stays weak in the middle of a leg and at its edge.

What makes one strong is a senior timeframe. It means an object from there stands on that same bar: either the bar lies inside an imbalance of the senior scale, or it coincides with a swing of that scale. An imbalance is a stretch that price covered fast and one way, without coming back.

Checking it takes one look

Look at the same bar on a senior timeframe. If it is a swing there too, or it fell inside an imbalance, it is strong. If it is neither, it is weak, and it deserves to be treated as such.

And you do not have to go exactly one timeframe up. The higher the one where the bar is confirmed, the more liquidity is there — and the stronger it is. This is a gradation, not a single step up: confirmation on the weekly weighs more than on the four-hour, and on the monthly more than on the weekly.

An example — gold, daily chart, autumn 2024: one frame holds the impulse, the correction and a monthly imbalance. Of the three lows of the correction, the first lies inside the imbalance, the second coincides with a weekly swing, and the third has neither — that is the weak one.

Taking liquidity is a reaction, not a break

The correction walks the lows of the impulse from the top down. Price reached the next one and bounced — the liquidity is taken, there is a reaction: orders stood here and they were filled.

If price went straight through and closed with the body below, there is no reaction here. Then it moves on, after the next liquidity: an imbalance or the next swing. This is the part most often confused: a break that closes with the body beyond is not a taking of liquidity but precisely the absence of a reaction.

The structure markup in the FocusProfit Trade Model indicator stands on these same extremes: ranges are assembled from confirmed highs and lows, and senior timeframes show which of them weigh more. Counting the bars by hand is still worth doing — that way you see where every line came from.

This is one of the lessons of the introductory "In Plain Words" course: one term per lesson. The topics are covered in more depth in the Learn section, and the causality in full is in the methodology. The next lesson in the course is market structure: why a low is broken but a reversal may not follow.