Price Waves
The Swingarm Pressure System employs a set of wave studies as an additional reference point for traders to interpret the price action of a specific financial instrument, whether it’s a stock, an index, a forex pair, or a cryptocurrency.
In response to the wave-like nature of price fluctuations, this system utilizes 10 distinct moving averages to chronicle the progression of price action. These wave formations offer a valuable visual representation of the dynamic support and resistance levels over time.
Overbought / Oversold Candles
The Swingarm Pressure System uses overbought or oversold candle indicators as an extra point of reference for traders to decipher the price action of a particular financial instrument, whether that’s a stock, index, forex pair, or cryptocurrency.
The pressure of the price is represented by the color of the candlestick. An overbought state, for instance, might be shown in a dark orange hue, while an oversold condition might be conveyed in blue. Regular price movement is illustrated in white. Even though the price could remain in an overbought or oversold condition for a considerable period, the candle will retain its respective color until a counter trend initiates, causing the candle color to transition to white. This presents another method to comprehend potential price action.
Trendline Pressure Signals (Bullish or Bearish Trends)
The Swingarm Pressure System incorporates a feature that signals bullish or bearish pressure as the price touches a trendline. This additional point of reference assists traders in understanding the price action of a specific financial instrument, be it a stock, index, forex pair, or cryptocurrency.
This pressure is quantified and marked on the label as a P21 through P144, representing the maximum pressure rating. The larger the number, the greater the directional pressure upon trigger. If the P144 pressure is unsuccessful, it likely indicates a failure in the signal and a further move might be anticipated.
Regression Channels & Standard Deviation
The regression channel study by LonesomeTheBlue, available on TradingView, can provide traders with an additional frame of reference to comprehend the price action of a specific financial instrument, be it a stock, index, forex pair, or cryptocurrency.
Grasping the concepts of regression channels and standard deviations can significantly assist traders in visualizing potential extremes in price fluctuations. I closely monitor zones with three standard deviations where the price might have hit an extreme, possibly signaling a pending price reversal. Used in tandem with other tools in the Swingarm Pressure System, this instrument can offer invaluable insights, guiding decisions on trade closures, scaling out, or considering a counter setup.
The SwingArm Trading Zones (Bullish and Bearish)
The Swingarm delineates three bullish zones and three bearish zones, offering traders an additional perspective for interpreting the price action of a specific financial instrument, whether it’s a stock, index, forex pair, or cryptocurrency. The further the price delves into the Swingarm zones, the more substantial the counteractive energy it may encounter.
When the price reaches an extreme within a Swingarm zone, it typically reacts and either reverses or rises, depending on whether the zones are bearish or bullish. This study simplifies the identification of key points of interest where significant buyers or sellers might be present.
The importance of a zone escalates with the timeframe. While this appears straightforward, it can become more intricate when multiple timeframes are taken into account. Swingarms operate in pairs and should be examined collectively to better grasp the potential energy to transition from one zone to another. There are both internal and external Swingarms. Swingarms that lie beyond the range of price action are external, while those within the two preceding price ranges are internal Swingarms.
If a price movement originates from an extreme external zone, there is the potential energy for the price to rebound to its next counterpart. For instance, a movement beginning in the ES 500 Futures’ extreme bullish zone on the two-month Swingarm on October 13th, 2022, would have its next major potential resistance in the weekly sell zones above, which over time could possibly break as the price strives to reach the monthly resistance zones further up. It’s crucial to always consider the energy source to better understand which Swingarms can break over time.
High Pressure Optial Entry Zones (Bullish / Blue) and (Bearish / Yellow)
The Swingarm Pressure System identifies optimal entry points for both bullish and bearish markets. These zones are color-coded for ease of identification, with blue indicating bullish high-pressure zones and dark yellow signifying bearish high-pressure zones. This offers traders an added frame of reference to comprehend the price action of a specific financial instrument, whether it’s a stock, an index, a forex pair, or a cryptocurrency.
These zones provide substantial advance warning of areas of interest where a significant counter pressure to price is highly probable. If the price is descending into the zone, it’s likely to rebound from it, often reaching the optimal entry line and bouncing off with remarkable accuracy.
3 Standard Deviations on the 15 Minutes timeframe
Employing regression channels across multiple timeframes, with settings for three standard deviations, can accentuate potential extremes where price is likely to react. This gives traders an additional vantage point to interpret the price action of a specific financial instrument, whether it’s a stock, an index, a forex pair, or a cryptocurrency.
Being mindful of price action extremes across various timeframes is vital in advising a trader to take suitable measures regarding current positions or when pondering new ones. The Swingarm acts as a verifying tool as it tends to break upwards or downwards when these extreme zones are confirmed as either support or resistance.
Trendline Pressure Signals of the 15 Minutes timeframe
Utilizing trendline pressure signals across various timeframes can pinpoint potential extremes where the price might react, offering traders an added reference point to comprehend the price action of a specific instrument, be it a stock, an index, a forex pair, or a cryptocurrency.
Trendline pressure spanning multiple timeframes is essential for identifying potential turning points. For instance, a P144 trendline pressure signal on a one-hour timeframe could exert the extra pressure needed for lower timeframe Swingarms to break down, prompting a drop to test support levels.
