How to Properly Identify and Draw Major and Minor Swing Highs and Lows

[baezacaljo]

Hi everyone i am looking for help, first of all let me tell that i am studying quite a lot SMC. However, i have a question.

I’d like to verify my own analysis of market structure on ETH on the 4 h timeframe by comparing it with how others interpret the same chart. Specifically, I want to see how you independently identify and draw the swing highs and lows on these four charts. This is not because I’m lazy or want someone else to do the work for me—on the contrary, I’ve already done my own analysis. I’m simply seeking an unbiased, external perspective to cross-check whether my swing highs and swing lows and internal swing highs and lows are correct or if I’m missing something.

Please do not ask to see my masket structure first (swing points), as that could introduce confirmation bias. I want your fresh, objective view based solely on the price action in the charts. Your independent markup will help me validate my strucure and improve my understanding on market structure across multiple timeframes. Thank you for your clear and detailed input!

I am sharing the image for you

[MartialChartsFX]

This is what I see on the 4 hour.

Where I stopped is where your picture starts. To me there isn’t major structure in the section of price that you have pictured, just sideways chop. On the lower timeframes there would be some structure.

[MattyMoney]

This is where I would place the swing points (see arrows):

As you can see, my placement of the swing points is quite different from @MartialChartsFX. But as he states and I agree:

@MartialChartsFX

there isn’t major structure in the section of price that you have pictured, just sideways chop.

[fyon26]

whenever you win =swing point legit

[baezacaljo]

Thank you very much, guys. I didn’t reply earlier because I was waiting for some movement on the chart. However, I still have a lot to learn, especially about market structure — I’m really struggling with that. For example, in the case of SOL/USDT from June 22 to October 10 (see image), I’m unsure which points should be considered swings.

Looking at different perspectives during that period, the market appears bullish in one view and bearish in another (daily timeframe). Please check the three images:

The first one looks bearish.

The second one looks bullish.

The third one looks bearish again — but I’m not sure which swings are correct (see green and red arrows).

Could you help me understand this better? I’ve been studying a lot, but at this point, I’m not sure how professionals interpret the chart.

[MartialChartsFX]

I don’t look at the market in terms of uptrend and downtrends necessarily. I look at the market in terms of market structure trading ranges based on the timeframe(s) that I use. The real challenge is filtering out the irrelevant structure.

As far as the mixed signals from multiple timeframes, you will almost always be counter trend to some other time frame either higher or lower. So you have to decide which timeframes you are anchoring your analysis to.

It might help to limit the number of time frames that you use. Too many timeframes can cause analysis paralysis from trying to decide which timeframe’s direction and structure should be used for a trade.

These are the time frames that I use and what I use them for:

Weekly - Mark All time high/low. Mark previous week’s candle high, low, and midpoint. My main concern with this timeframe is knowing if the current week is an inside bar, breaking out above or below the previous week candle and the boundaries of the ATH/ATL. I only look at this on Sundays.

Daily - Mark the highs, lows, and midpoints of the previous 2 daily candles. Mark any obvious S/R levels or zones. Same main concern with this timeframe as with the weekly as far as watching out for inside bar days. I update these levels at the end of each trading day but I don’t revisit the daily during the trading day.

4 Hour or 1 Hour - Look for zones to trade from using whichever is clearer of these 2 time frames. I mostly use the 1 hour and keep this setup timeframe open throughout the day. This is where most of the analysis occurs and determines which direction I will trade.

15 Min or 5 Min - Use this to find my entries when price gets to a 4 Hour or 1 Hour zone. I will also use these timeframes to jump in on a fast moving trend. If my setup is on the 4 Hour, I’ll find entries on the 15 Min. 1 Hour zones/setups, I enter on the 5 Min. I mostly trade futures so I’m in and out trades within the same day.

[ananhossain]

Great initiative! Cross-checking structure objectively is one of the best ways to refine SMC skills. On ETH 4H, I’d focus on identifying the most recent BOS (Break of Structure) relative to liquidity zones — often, traders over-label internal swings. Keeping only major pivot points with clear displacement helps maintain a clean structure map.

[tommor]

There is a simple way of identifying swing highs and swing lows for those who lean towards a more objective method.

First you need to re-colour your candlesticks.
A blue candle has a higher high and a higher low than the one before it.
A red candle has a lower high and a lower low than the one before.

Look at the last three consecutive candles. If all three are red, then the low of the third candle is a putative swing low. It is confirmed as a swing low if the next candle is blue. A breach of the swing low candle’s high could be used as a buy signal - you might add a rule that all the candles must be above a certain MA before you would consider doing this. you could also use the low of the swing low candle as a stop-loss level.

Vice versa for three blue candles of course.

[baezacaljo]

Thank you very much, guys — what beautiful and outstanding answers!
@MartialChartsFX @ananhossain @tommor @MattyMoney

Believe me, I’ve been studying and reading a lot of posts, even here on BabyPips — I think @MartialChartsFX wrote some of them.

Now, everything discussed here represents my personal analysis (remember, I’m still a beginner, so I might be making some terrible mistakes).

Starting with the weekly timeframe, I first checked the overall bias, which is bullish. I marked the swing high and low and identified potential liquidity zones ($$$$). I also took a Fibonacci retracement of that leg and highlighted the 50–61.8% discount zone, which aligns with a Fair Value Gap (FVG). I noticed that price is currently in a pullback, where both negative delta and negative volume seem to be decreasing (see image).

Then, moving to the daily timeframe, I observed a bearish trend. Within this range, there’s an Order Block (OB) that falls right inside the Fibonacci premium zone (considering the last leg of the daily TF). Below it, there’s daily liquidity ($$$$) and a Daily FVG that refines the weekly one. I expect this liquidity to be taken — but only after price rises a bit toward the OB, given that we are still in a daily pullback (see image).

Dropping down to the 4H timeframe, the daily OB becomes more refined. There’s also liquidity and an unmarked FVG between the $$$$ and the OB. I expect this liquidity to be taken. Delta is increasing, showing buying pressure, but since the 4H trend is still bearish, I consider this move to be a correction (pullback) (see image).

Finally, on the 15-minute timeframe, I noticed liquidity compression that I expect to be taken first — meaning price may dip slightly before rising toward the 4H liquidity and OB (first trade).

From there, I’ll wait for a bearish Quasimodo pattern to form inside the 4H Order Block, but it must be clearly visible on the 15-minute timeframe. This setup would target the Daily FVG that aligns with the weekly Fibonacci zone. That would be my second trade (see image).

I’d really appreciate your comments, critiques, and suggestions for improvement — or even if you want to tear apart the whole analysis, please do so. That kind of honest feedback will help me a lot to improve and gain a clearer understanding in this area, especially since you guys are true experts.

[tommor]

I don’t use the technoques and TA features in your strategy so I can’t comment on it.

[MartialChartsFX]

Wow…that’s sound very complicated. I abandoned SMC in favor of simplicity a while ago and haven’t looked back. I almost forgot SMC had so many moving parts. But much respect for putting your analysis out there for feedback.

That’s the good thing about trading…it can be as simple or as complex as you want it to be.

Do you hold trades multiple days or open and close within the same day?

Since I avoid SMC like the plague, it’s hard to give feedback but I’ll post my top down analysis of ETHUSD.

Weekly:
This is about all I would be looking for and this is more than I usually look for on the weekly chart (I’m trying to keep up with your analysis). So finding the Market Structure Trading Range, ATH/ATL, High/Low of the previous week’s candle, an obvious break of structure above a clear level of resistance, and a weekly area of interest (I don’t use FVGs so this is not that).

Daily:
Previous Day high and low, 2 days ago high and low. Market structure trading range and obvious support and resistance.

4 Hour:
It’s ranging so nothing much to see here for me.

1 Hour:
Find my most recent trading range which should hold the setup and identify the where I would sell from or buy from. Price is already at an area of interest so I’d look to the 15 Min or 5 Min once price breaks below the confirmation sell level or above the market range high.

5 Min:
I’ll take short term buy trades until price breaks the confirmation sell level then I would be looking for longer shorts.

I don’t know if this will work out on the 5 Minute, but it’s what I would be looking at based on what price is currently doing. I only enter when there is market structure based confirmation and there isn’t confirmation to buy at the time of this 5 Min screenshot.

[baezacaljo]

@MartialChartsFX Beautiful analysis! It’s actually quite simple. When I first got into trading, I felt pretty comfortable with SMC, it seemed clear to me. But again, I’m still a complete beginner and not profitable yet. Regarding my trades, I usually hold them for a few days, never more than five.

Looking at your analysis now, that short trade after confirmation is something I completely missed — and it’s actually a great option. I skipped the 1-hour chart because I saw a Quasimodo pattern on the 15-minute, which is why I went straight for that ‘first trade.’ However, after reviewing the 1-hour chart, the trade you mentioned makes a lot of sense to me.

By the way, it would be great to hear other people’s thoughts and ideas as well

[MartialChartsFX]

That’s great that SMC works for how you interpret the market. At the end of the day, being able to interpret the market and make money from it is all that really matters.

@baezacaljo

that short trade after confirmation is something I completely missed — and it’s actually a great option

Only time and the market will tell if it is in fact a great option

[MattyMoney]

I’ll admit, I’m a pretty simple trader; I like channels, trend-lines and market structure in the form of HH/HL or LH/LL. If I see a break and retest then that’s a bonus.

I don’t trade ETH very often, but if I were to trade this then the daily chart would be all I needed. In fact, most of my trades are based off the daily charts as this TF suits my schedule best.

Here you see LH/HL forming a channel down, which I agree is a pullback of the weekly chart.

There are 2 scenarios I have marked out here (red & blue paths); both are bullish long-term and both are looking at a bounce somewhere around that longer-term daily trend-line.

[MartialChartsFX]

Because I don’t like to leave things without a conclusion.

[baezacaljo]

Guys, thanks a lot for your analyses — and @MattyMoney, yours is so simple that I can hardly believe it leads to results so similar to @MartialChartsFX’s and even parts of mine. It seems we’re all expecting the price to drop, more or less, toward the 3500 level. This is exactly the kind of insight and trading approach I’ve been looking for — methods that people are actually using right now.

Now, regarding the results: it seems the short-term move has already played out. My question is — do you think the price will keep going up from here, or is it time for a deeper pullback?

By the way, when you trade crypto, do you also monitor the Dollar Index (DXY) or Bitcoin Dominance (BTC.D)?

Also, for those trading crypto, do you stick to specific coins, or do you use a screener? Personally, I’ve mainly been analyzing BTC, ETH, SOL, ENA, LINK, and AVAX.

One last question: I currently live in Brazil, and a friend asked me whether Smart Money Concepts (SMC) could be applied to the Brazilian index, WINFUT. I tried it — and it was a total disaster. Then I did something I’m not very proud of: I asked ChatGPT whether SMC can be applied to WINFUT, and it said no, mainly because of the limited “space” or range of movement during trading hours. The suggestion was to rely more on moving averages and VWAP instead. Is it the same case for the S&P 500 or other indices and stocks?

[MartialChartsFX]

@baezacaljo

Now, regarding the results: it seems the short-term move has already played out. My question is — do you think the price will keep going up from here, or is it time for a deeper pullback?

Price is in my 1 Hour area of interest so it may drop down to this unmitigated zone

@baezacaljo

By the way, when you trade crypto, do you also monitor the Dollar Index (DXY) or Bitcoin Dominance (BTC.D)?

I rarely analyze or trade crypto. I stopped paying attention to DXY or USDX since it’s so heavily weighted by the EURO. I only rely on the chart I’m looking at.

Is WINFUT on TradingView? I’d like to see what I can do with it.

[baezacaljo]

Yes, TradingView has WINFUT, just search for WIN WIN1! 152,080 ▲ +0.49% Silver.

Regarding the unmitigated zone in ETH, that area lies right within the Fibonacci discount zone (50–61.8%), considering the last one-hour leg. I also noticed some support forming there. However, looking at the yellow box, it’s possible to observe two divergences (marked by the red and green arrows) within that range. Both were accompanied by huge volume and strong positive delta, yet the price didn’t move up — interesting, right? Why?

Then, as the price stayed within the range trying to push higher again (see the black arrow), volume increased once more but wasn’t as strong as before — again, why? My guess is that the price needs liquidity (fuel) to move higher. So, where is that liquidity located? Likely in the Fibonacci discount zone (see 1-hour chart image).

By the way, the drop you’re expecting is the same one I predicted earlier on the 15-minute timeframe.

Looking again at the 15-minute chart, we can indeed see a small consolidation forming there.

Please correct me if something is not ok.

[MartialChartsFX]

I can’t correct anyone, the market does that. The unmitigated zone is just based on how I find zones, I didn’t really look into that deep, but those are good observations.

Looking at WIN! based on where I find my zones, it doesn’t look like anything different.

I don’t see why any strategy based on market structure wouldn’t work on WIN!.

[samewise]

@MartialChartsFX

It might help to limit the number of time frames that you use. Too many timeframes can cause analysis paralysis from trying to decide which timeframe’s direction and structure should be used for a trade.

Just want to point this out. I 100% agree! You end up not doing anything because of conflicting info. But sometimes you’re just too early or late in the move, and it becomes hard to make up your mind.