Swing Highs and Lows — Where Structure Begins

Before you can talk about a break of structure or a shift in character, you need agreement on where the swing points are. In our workshops, this is where most arguments start — and that is useful. Disagreement forces you to articulate why you chose one wick over another.

The three-candle rule (and when to bend it)

A swing high forms when the middle candle's high exceeds the highs of the candles on either side. The same logic applies in reverse for swing lows. This sounds simple until you open a volatile session on the SET Index and find six consecutive candles with overlapping wicks.

We teach participants to start with the strict three-candle definition, mark every candidate, and then apply a filter: does this point matter for the current narrative? A minor wick inside a consolidation may be technically valid but structurally irrelevant. Note it in pencil, not pen.

Equal highs are not accidents

When price revisits a prior swing high without breaking it, liquidity tends to accumulate above that level. In Bangkok sessions, we see this frequently on USD/THB during Bank of Thailand announcement weeks. Mark the equal highs, note the date, and watch what happens on the next approach.

A marking exercise for this week

Pull up any daily chart you follow. Mark swing highs and lows for the last 60 bars using the three-candle rule only. Then zoom to the four-hour chart for the same instrument and repeat. Compare the two sets of markings side by side. The gaps between timeframes are where shifts hide.