Let’s make it simple
A path up a hill has little dips along the way. A dip does not instantly turn the whole hill upside down. A trend is also about a series of movements, not the colour of one candle.
Understand the idea
A swing high is a local high area with lower prices on either side. A swing low is a local low area with higher prices on either side. You usually need later prices to recognize a swing; it was not obvious in advance.
An uptrend often has higher swing highs and higher swing lows. A downtrend often has lower highs and lower lows. In a range, price moves back and forth without a clear rising or falling sequence.
These descriptions depend on the timeframe. A short decline can sit inside a longer rise. If the evidence is mixed, write "unclear" rather than forcing a trend label.
Read exact candle values
| Candle | Open | High | Low | Close |
|---|---|---|---|---|
| A | 10 | 14 | 9 | 13 |
| B | 13 | 14 | 10 | 11 |
| C | 11 | 18 | 11 | 17 |
| D | 17 | 18 | 13 | 14 |
| E | 14 | 21 | 14 | 20 |
A small worked example
Swing highs of 14, 18 and 21, with swing lows of 10, 13 and 16, describe a rising sequence. A later low of 12 would challenge that sequence, but one number does not explain the whole market.
Your turn
Draw the example as a zigzag. Label the highs H1, H2, H3 and the lows L1, L2, L3. Add a second zigzag that stays between 10 and 14.
Compare your exercise with a model response
Label rising highs and lows. A second zigzag can bounce repeatedly between 10 and 14.
Pause & think
Check your understanding
Write an answer, then compare it with the explanation. This is self-study, not an automatically graded test.
Compare all three answers to unlock the review button.
Fictional examples. Education only; no pattern guarantees a result. Course information