The swing leg count

This is yet another very simple way of what we use to assess markets for the upcoming day in its likely probabilities on where prices might be heading.

It is in its simplicity of these variable tools we bring to the table for this market assessment where most traders struggle with.

The mind and ego falsely like us to believe that:

"it can't be that easy"

and that's where we are wrong-the tricks in trading aren't in complexity, algorithms and alike

it is much more in a bias free observation of markets and as such the simpler the better to allow less points where doubt can creep in.

In case of this principle of the swing leg count the approach is as simplistic as it can be.

This being said it is important to not confuse our way of seeing where price might find itself in a directional market in the time frame we are observing(daily call=daily time frame) from any of the more complex wave theories like for example the Elliot Wave Theory.

We merely make a very simple assessment of counting the progression of how many swing legs (higher highs and higher lows in an uptrend with price retracements separating the legs) have been matured prior up to date.

The rules are very simple:

if price finds itself in the first leg after a turning point it has a high probability to enter into the second leg which is typically the longest one

if price finds itself in the second leg a trend continuation is more likely than not

and starting with the third leg we expect a possible tuning point to be coming up

again it depends on back testing results of the individual trading object on how likely 4th and 5th leg occurrences are.