The Swap, a Simple Frame for Markets

It’s easy to get overwhelmed when looking at all the crosscurrents in markets along with all the technical analysis that is out there. Trading does not have to be complicated, it’s a matter of using our tools to see if the buyers or sellers are in control and where that changes. We have several simple ways to map and read markets. In this post, we are going to focus on the simple swap area of a swing and use that as a framework to read and trade markets. The swap area of a swing turning up or down is a significant market structure where the balance of power changes. Learn to see it and then make observations as to how price interacts with that area. Then design ways to read and trade it.

Following Swings Into the Gap on the Left

In the previous post “Gap On The Left”, we looked at a simple, relaxed way to read and follow markets. In this post, were going to combine that with relative swings and follow price down into the gap on the left and let it tell us when it wants to turn back up. So often as traders, we ignore “what is” occurring in favor of what we think or want to occur. You can reference the post “One-Line Practice For Personal Insight” for practice in following swings.

The Gap on the Left

In this video, I will show you a simple visual way to read the flow of the market. Big Gaps are easy to see on the chart, our eye naturally gets drawn to them. A gap is a quick supply-demand imbalance that pushes all the guessing traders (contraction) into or out of their positions (expansion). Use this simple framework to make observations then create your own ways to trade it using those observations.