What Is an Expanding Swing?

Markets move in contraction/expansion. Small swings can be thought of as a form of contraction and the bigger swing is a form of expansion. An Expanded Swing is simply a reaction leg that is bigger than the previous reaction leg or legs. Its minor swings growing up to be major swings.

This represents a change in behavior that often causes confusion among the shorts and the longs. The shorts are fearful cause the market is now backing up on them and the longs are fearful cause they see a market now turning up and getting away from them. This confusion creates an opportunity for those that are sitting back with a plan.

To see this price action on a chart, it helps to have some simple and objective definitions for mapping the market and I show this in the video. First, we use market structure to read the market, and then we use a trading structure (trade plan) to structure the actual trade where we manage risk.