Trading Skills #1: Find Swing Pivots

Question 1

What is Market Structure?

Answer 1

A cornerstone of Price Action Trading

1. Analyze the market and it’s turning points
2. Use it as a foundation for in-depth price analysis

• By observing price swings you can look for patterns that reveal market bias
• PA swings form building blocks for chart patterns

3 Simple Methods to Determine Price Swings:

1. Hull Moving Avg
2. Typical Price Moving Average
3. Simple Moving Average

Question 2

What is the Hull Moving Average?

Answer 2

Alan Hull designed the HMA to minimize lag and maintain a smoothed MA

• When the HMA is sloping upwards= market is in an upswing
• When the HMA is sloping downwards= market is in a downswing

Question 3

What is Typical Price Movement?

Answer 3

The typical price is the average of a candlestick high, low and closing price

• How to Identify Price Swings w/ Typical Price Moving Average
  . Apply a 3 period sma of the typical price
  . The default input for calculating MA is the closing price, change that to typical price
  . The direction of the typical price MA= Price Swings

Question 4

What is a Simple Moving Average(SMA)?

Answer 4

• How to Identify Price Swings w/ SMA:
  . Apply 20 period SMA
  . When candlestick forms entirely above sma= Upswing confirmed
  . When candlestick forms entirely below sma= Downswing confirmed