Swing Points: How To Mark Them Correctly (Free Guide)

Key takeaways

A swing high is one candle with lower highs on both sides; a swing low is one candle with higher lows on both sides
That single candle is where the market changed direction, which is why the level matters later
A broken swing high becomes support in an uptrend; a broken swing low becomes resistance in a downtrend
Never trade the touch alone: demand an engulfing candle, rejection wick or fair value gap at the level
Stop beyond the most recent swing, target the next swing on the opposite side

The map most traders never draw

A downtrend marked with H, L, LH and LL labels at each swing, with dotted levels running off every swing point — Every trend is just swings: highs and lows printing lower, or higher, in sequence.

Strip the indicators off any chart and what is left is this: a sequence of swing highs and swing lows. Mark them correctly and you can read the trend, the pullbacks and the levels that matter, all from raw candles. Mark them wrong and every "support" and "resistance" you draw afterwards inherits the mistake.

Step 1: The swing high, defined

A single tall candle with a protruding upper wick, arced and labelled swing high, with lower highs either side — One candle, lower highs on both sides. That is the entire definition.

A swing high is one candle with a lower high on each side of it. Nothing more. If the candle to the left and the candle to the right both have lower highs, the middle candle is your swing.

Step 2: The swing low is the mirror

A candle with a deep lower wick, arced and labelled swing low, with higher lows either side — One candle, higher lows on both sides.

A swing low is one candle with a higher low on each side. That single candle is where the market changed direction: sellers ran out, buyers took over. The reason swing points matter later is exactly that, they are the footprints of a real change in control.

Step 3: In an uptrend, broken swing highs become support

An uptrend where a broken swing high level is shaded as a support zone, with the pullback tagging it and rallying — The old swing high, once broken, is where the pullback finds buyers.

When price breaks above a swing high with force, that old level does not disappear. It flips. The broken swing high starts acting as support, and the pullback into it is where you hunt buys, with the trend, at a level the market has already proven it cares about.

Step 4: In a downtrend, it flips

A downtrend where a broken swing low level is shaded as a resistance zone, with the bounce tagging it and selling off — The broken swing low becomes resistance; the bounce into it is the sell zone.

Same logic, mirrored. A broken swing low acts as resistance in a downtrend. The bounce back into that level is where you hunt sells. Notice you are never chasing the move, you are waiting for price to come back to structure.

Step 5: Make the level prove itself

A retest of the level with three confirmations marked: an engulfing candle boxed, a rejection wick glowing, and a fair value gap shaded — Engulfing, rejection wick, or a fair value gap at the level. No confirmation, no trade.

Don't take every touch. A tag of the level with no reaction is not a setup. Wait for one of three confirmations right at the zone: an engulfing candle, a rejection wick, or a fair value gap left by the leg that broke the swing (price pulling back into that gap is the market re-testing its own displacement). If none of them show up, the level failed the audition, skip it.

Want the full entry method built around that third confirmation? It has its own guide: the fair value gap entry.

Step 6: Stop beyond the swing, target the next swing

The completed trade map: entry line at the confirmation, red stop zone beyond the swing point, green target zone at the next swing — Structure on both ends: stop behind the swing that must hold, target at the next swing.

Entry at the confirmation. Stop beyond the most recent swing point, so the market has to actually break structure to take you out, not just wiggle. Target the next swing on the opposite side. Both ends of the trade are anchored to structure, nothing is arbitrary.

Watch the full breakdown

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Frequently asked questions

What is a swing high?

One candle with a lower high on each side of it. That single candle is the exact spot where buyers ran out and sellers took over, which is why it becomes a level worth marking.

What is a swing low?

The mirror: one candle with a higher low on each side of it. It marks where sellers ran out and buyers took over.

Why do most traders mark swing points wrong?

They mark every small wiggle, or they mark levels mid-consolidation where nothing actually turned. A real swing point is a visible turn: price approached, printed the extreme candle, and left in the other direction. If you cannot see the turn at a glance, it is not a swing.

What happens when a swing high breaks?

In an uptrend a broken swing high starts acting as support. The pullback into that old level is where you look for buys. In a downtrend it flips: a broken swing low acts as resistance and the bounce into it is where you look for sells.

Do I enter as soon as price touches the old swing?

No. Make the level prove itself. Wait for an engulfing candle, a rejection wick, or a fair value gap right at the level before entering. A touch with no reaction is not a trade.

Where do the stop and target go?

Stop beyond the most recent swing point, so the market has to break structure to take you out. Target the next swing on the opposite side, which keeps the trade anchored to structure on both ends.

Written by Tony: AA Global FX
Tony runs a live trading desk on Deriv synthetic indices and index CFDs and has published 116+ free trading tutorials on YouTube since 2022. About · YouTube
Last updated: 2026-07-28

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Swing points feed straight into the entry method: read the fair value gap entry guide next. New to trading entirely? Start with the free beginner course: 20 short lessons from zero to your first demo trade.