Hi I am trying to get good with fibonaccis but I am having trouble identifying swing highs and lows. I have been told that it should always be the highest point and there should always be a lower high on both sides . so in a case like this which point is the swing high?
Here is the correct one
Your first “here” i.e. the one uppermost on the chart and the green candle with the long wick.
The rules for these are not as rigid as one may be led believe though. Some say to have lower highs on either side, some say to have at least two lower highs and two lower lows on either side (Fractals) (Bill Williams). The list and possible confusion goes on.
Suffice to say though that a breakout would be deemed to be such if the high of that green bar with the long wick was breached. That high could also be considered as resistance if tested and price fails at that point again.
Not to complicate further but there are also points known as significant highs and significant lows i.e. the highest high or lowest low made while in the previous long or short trade (Welles Wilder).
And then there are failure swing highs and failure swing lows… LOL!!!
Anyway:
If I were to be drawing Fibonacci lines though (which I don’t but that is beside the point) then for sure it would using the high of that green candle with the long wick as per your uppermost “here” on the chart. Price went up to that level and retraced for a reason (whatever that reason may have been at the time).
Regards,
Dale.
2 Likes
Maybe of more interest is which is identifying the swing low after the swing high…
Thanks for all the tips