Thank you for coming and watchingthis video today we're going to talk about how todetermine swing highs and lows for Forex trend trading but actually this appliesto stocks commodities emini futures pretty much anything you can chart buthere's the question that comes in and an answer to that question the
questionthat comes in is very how do I determine how your highs and higher lows so we'reall taught that when we look for an uptrend you want to see a higher highshigher lows higher highs higher lows and that's great in theory but then when itcomes down to actually applying
this to a chart how do you do it objectivelyit's really a pretty subjective thing so you know you look at this chart and yousay well which highs do I want to measure is it going to be that high andthis is going to be my low or do we
say well those bars really are all kind ofjust bunched together there so that high doesn't really matterbecause you know these bars are all kind of covering each other up in other wordsthat part is inside that bar that person's high that one that one insidethat one so maybe we
shouldn't count that one so maybe instead we should justsay well okay you know that is the high and that's the low but then we getanother question well wait a minute what about that low but there's no real likesignificant high I guess maybe that and anyway point is you
see how it can getvery subjective and different people looking at a different chart or at thesame chart rather they will look at different highs in upper lows so therewould be one but then is that a lot higher here because we get a green bardoes that qualify okay so
let's learn a way to make thisobjective instead of a subjective all right so here's one way of doing that sofirst of all I'm going to bring up the indicator and this is an indicator thatI think about pretty much all charting platforms I've ever seen it's justcalled the zigzag
indicator let me move this over here so you can see it clearlythis is exact well right now there's going to be different parameters you canset it varies from platform to platform I'm sure but usually they do allow youto do it by points or percent or they might have
some other options as wellthis is NinjaTrader 7 so I like to use percent because if you use points thenyou've got to be changing around for each market that you're tradingdeviation value now that's going to be very important and there's no one rightanswer with that so again that's where
you want to look at the market you mightwant to change it for some different markets I've got it at 3 and it's goingto be measuring more major highs and lows so the bigger you make that numberyou're telling the indicator I just want to find the big highs and
lows if youwant to make it more granular and plan all the little moves in the market thenobviously you make that number smaller alrighty so let's put it on the chart sothat's what it looks like all right so now you don't have to guess you have anindicator that is
mathematically calculating for you which highs and lowsbased on of course the numbers you chose so there you go cool now what what doesthis mean so we set a bigger number and therefore it skipped a bunch of thesehighs and lows and it's marking this low as a big one
that one is a big high andskipping all these other little ones and if you made the number smaller get withthem catch those fact let's do that let's just show you what that looks likehere real quick so if I bring the indicator up again go back here changethe setting
change the deviation value to oh I don't know let's say 1% so thenyeah it does that ok so but now you have to ask yourself ok how meaningful isthat all those little honey's and lows that really can be helpful in yourtrading so for me no not so much
so that's why you don't have to use thatthat's we use the bigger number okay let's go back to the bigger number sowhat's the practical use of this how I use it is more for support resistancesupport resistance levels I would say some of the most important supportresistance levels are
major highs and major lowwas that stand out to pretty much everybody in the market who's looking sofor example you know these little ones these are not going to provide majorsupport resistance but these big ones are everybody see this is a euro USdollar daily chart so a lot of
people are looking at this timeframe and a lotof people are going to see that low in that high and then that becomes aself-fulfilling prophecy and that therefore causes people to behave incertain ways when the market approaches those levels the way they behave as theybuy off those levels they
sell off of those levels they take profit into thoselevels so let's just show one example here we'll just take this first one puta horizontal line on it okay there we go and move forward I'm going to change thescaling here just a little bit so as you can see
I actually have to change itquite a bit the market came down to it here okay close enough I mean yeahdidn't quite touch it but remember support resistance levelsare zooms so don't get carried away with the line don't analyze every pixel ofthe line on your chart for support resistance
they are zones and so that'sclose enough for government work and close enough for the trading of theMouse's around the globe but notice what it did it went down okayprovided support came back up you can see the line there breaks through itthis time comes back now this is of
course the technique known as reach orsupport here it becomes resistance and goes back down so that is primarily howI like to use it so and we can even look over here and you know this is withinthe zone of that hi there mark that high and it came right
up to it there so it'sprovided so this high provided resistance for this move up so this isone way to do it you don't have to be sitting there andguessing you can put it on your charts and have a something do it for youmathematically based and it's beautiful it
really provides these wonderfulsupport resistance levels that lots of people see and again there's no managerto that it's just that when a lot of people see it then mass psychology kicksin and when a lot of people see something they respond to it andtherefore it does affect the market so
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