Swing highs and swing lows: the one definition everything else is built on
Everything in price action is built from swing points. Market structure is a sequence of them, support and resistance are drawn from them, a breakout is a close beyond one, and a stop goes behind one. If your definition of a swing is vague, everything downstream is vague too, which is the usual reason a trader's structure reading disagrees with itself from one day to the next. This module gives a single, mechanical definition you can apply the same way every time, explains the difference between the minor swings that form inside a move and the major swings that bound it, and shows how to mark both on a gold chart where wicks make the extremes noisy. It is a short module and the least glamorous in the course. It is also the one that most decides whether your reading is consistent.
The definition
A swing high is a candle whose high is higher than the highs of the candles on both sides of it. A swing low is a candle whose low is lower than the lows of the candles on both sides. That is the whole definition, and it is deliberately mechanical. The simplest version uses one candle either side; a stricter version uses two or three, which filters out the smallest wiggles. Pick one and stick to it on a given timeframe. The reason to be mechanical is that it removes you from the decision: a swing is a swing because of the candles around it, not because it looks important. You then separately decide which swings matter, which is the next section, but you never argue about whether a point is a swing at all. On gold, use the wick extremes, not the bodies, because the wick is where the push actually ended and where stops will sit.
Minor swings and major swings
Apply the definition to any chart and you will get a lot of swings, most of them small. They fall into two kinds. Minor swings are the small turns inside a single leg of a move: the pauses and wiggles as price travels from one important point to another. Major swings are the points where a whole leg ends and a new one begins in the other direction, the ones that bound the move you see when you squint. The distinction is one of scale, and it is fractal: the major swings on M15 are the minor swings on H4. A practical rule is that a major swing is one that a higher timeframe would also show as a swing. If an H1 swing high is also the high of an H4 candle that is itself a swing high, it is major for your purposes. Structure in the next module is read from major swings; minor swings are used for entries and stops on the trigger timeframe.
Marking them consistently
Consistency matters more than the particular rule. Decide how many candles either side you require on each timeframe, and apply it without exception. A reasonable default for gold is one candle either side on H4, where every candle already covers four hours of trading, and two candles either side on H1 and M15, where single-candle wiggles are frequent. Mark swings using the wick extreme. Do not mark a swing because it looks like a turning point if the candles either side do not qualify it, and do not skip one that qualifies because it looks unimportant; it may be minor, but it exists. When price makes a new extreme, the previous swing of the same type does not disappear, it becomes part of the history that structure is read from. Many traders mark swings by eye and get a different chart every time they look. The mechanical rule gives you the same chart every time, which is the only way to learn from your own reading.
Swings are the raw material of structure
Once swings are marked, structure is simply the comparison between successive swings of the same type. If each swing high is above the previous swing high and each swing low is above the previous swing low, the sequence is rising. If each is below the previous, it is falling. If they overlap with no consistent order, the sequence is sideways. That is the entire content of the next module, stated in one sentence, and it only works because the swings were marked consistently first. The same swings supply the levels: the most recent major swing high is the first resistance, the most recent major swing low is the first support. And they supply the stop: a long entered on a pullback has its stop beyond the swing low that the pullback made. Learn to see swings and you have already seen structure, levels and stops; you only need the vocabulary to say so.
Swings and the stops that sit behind them
A swing point is also where other traders have placed orders, which is why price so often pokes through one before reversing. A long entered on a bounce has its stop below the swing low; a short entered at a swing high has its stop above it. When price revisits that swing, those stops are the fuel for a brief push through it, and that push is what produces the long wicks you learned to read in Module 2. This is why the course prefers closes to touches: a wick through a swing low that closes back above it is the stops being taken, not the swing being broken. The SMC course and the ICT course build detailed models on this idea under the name liquidity. For price action it is enough to know that swings attract stop runs, to give your own stop room beyond the wick, and to treat a wick through a swing as a test rather than a break until the close says otherwise.
Swings on gold: handling the wicks
Gold makes marking swings harder than most instruments because its wicks are long and frequent. Two practical adjustments help. First, use the stricter version of the definition on H1 and M15, two candles either side, so that a single news spike does not create a swing that the next candle immediately erases. Second, when two candidate swing highs sit within a few dollars of each other, treat them as one swing area rather than two separate points; the market is defending a zone, and that zone is what you will mark as a level later. Around scheduled releases, a candle can produce a wick that qualifies as a swing on every timeframe at once. Mark it, because stops will cluster there, but do not treat it as a major swing until price has traded away from it and come back. The habit to build is simple: mark every swing by the rule, then decide which are major by asking whether the higher timeframe agrees.
FAQ
What is the exact definition of a swing high?
A candle whose high is higher than the highs of the candles immediately either side of it. The strict version requires two or three candles either side. A swing low is the mirror: a candle whose low is lower than the lows of its neighbours. Use wick extremes, not bodies.
How many candles either side should I require?
Pick a number per timeframe and never change it. One either side works on H4 for gold because each candle already covers four hours. Two either side suits H1 and M15, where single-candle wiggles would otherwise create swings that mean nothing.
What is the difference between a minor and a major swing?
Scale. Minor swings are the small turns inside one leg of a move; major swings are where a whole leg ends and the next begins. A useful test is whether a higher timeframe also shows the point as a swing. Structure is read from major swings; minor swings serve entries and stops.
Does a wick through a swing low break it?
Not by itself. A wick through a swing with a close back above it is usually stops being taken, which is a test, not a break. The course treats a break as a close beyond the swing, with the next module defining that precisely.
Why does marking swings consistently matter so much?
Because structure, levels, breakouts and stops are all derived from swings. A trader who marks them by eye gets a different chart every time and cannot learn from past reads. A mechanical rule gives the same chart every time, which is what makes the rest of the method repeatable.