Protected Swings in Trading

Introduction

Definition of protected swings: Highs or lows expected to hold as the trend continues.
Importance of understanding protected swings in trading.

Bullish Scenario:
- Expectation: Low remains intact if the trend continues higher.
- Definition: A low is considered protected if it is swept out and then the price closes through the series of down-close candles that formed the low.
- Marking: Once price closes above those down-close candles, the low is protected.
Example:
- Identify a low followed by a series of down-close candles.
- Confirm protected low when price closes above this level.

Price reaches into a fair value gap and forms a protected swing after closing above the series of candles that made that low.
Anticipation: Expect the low to hold if the price continues higher.

Price Behavior:
- When price trends down and approaches important levels, check for closure above down-close candles.
- If the price does not close above, the trend remains bearish.
Trading View Example:
- Observe price sweeping out lows and forming consolidation before making trading decisions.

Key Steps:
1. Identify highs and lows in consolidation.
2. Wait for confirmations through closures of relevant candles.
3. Track protected swings for anticipation of market movements.

Short Selling:
- Look for highs to be swept out and form protected swings.
- Entry points should be near the protected swing highs for better risk-reward ratios.
Long Positions:
- After identifying a protected low, look for points of interest to enter trades.
- Ensure the trend is confirmed by tracking protected swings.

Anticipation: Expecting a swing to form based on current price action.
Confirmation: Requires closure through series of candles for a swing to be validated.