Why Swing Markers Move

Pesavento Patterns Swings/Markers

17:28 Ensign Howard: now the next topic to cover is a bit more explanation of the swing points you all see in the Pesavento Patterns tool. This has become one of the most used tools in Ensign. This is a very popular study and used in many different ways.

17:36 Ensign Howard: In this example we have the swings found by the PP tool marked with trend lines and with the blue ball markers. This looks very nice historically, but is a bit more challenging when viewed in real-time

17:37 Ensign Howard: Take, for example the last big up swing at the right side of the chart. The blue ball and the last trend line are only showing for the final best position of this swing up at the 1.3613 price. However, while this swing was in progress of being made from 12:30 to 14:45 there were several points along the way that had the trendline drawn and the blue ball positioned above.

17:39 Ensign Howard: The tool tries to be real-time, and marks potential swing points along the way. These interim points were 'undrawn' or removed when they were replaced by a better swing point that followed. This moving target of the swing point to a better swing point is frustrating to some but we have no way of really knowing if the current swing point will be a final 'best' swing point that sticks.

17:42 Ensign Howard: Let me illustrate the issue with a DYO that connects swing points from the Pesavento Patterns flags.

17:42 Ensign Howard: This is a clever little DYO that connects the Highs of bars that were tagged by the Pesavento Patterns as a swing bar

17:43 Ensign Howard: Some of these swing bars were 'best' points and have the swing point balls on them, and others were interim points that were replaced by better swing points that followed.

17:44 Ensign Howard: Take for example, the last two green balls, but the green line intended to connect these two points, is connecting a couple highs between them and makes for a bent line. Also the last red line connecting the swing lows first jumps to the 3rd bar after the last swing high. That was a swing low point at the time the bar was forming, but it got replaced by lower lows in the down trend.

17:46 Ensign Howard: The last red ball is showing on the lowest bar in the downmove, but it COULD also be an interim swing low if it is taken out by a lower low before an uptrend is seen. If the last red ball swing point is taken out, the red ball on that bar will be removed (now that it has the benefit of hindsight) and the last trend will be drawn from the last green ball on the swing high to the new lower low swing price

17:48 Ensign Howard: IF we know NOW that this marked swing low was NOT going to be taken out, we would have a crystal ball worth millions.....

17:49 Ensign Howard: So, you see the challenge of marking swings in real-time, .... but the tool is better than nothing and subject to changing what gets marked as new data is added to the chart.

17:49 Ensign Howard: Any questions? Do you want to see the DYO properties used for the example?

17:49 mikey: The Pesavento patterns tool in the studies window does not have any balls.

17:50 Ensign Howard: Mikey, you can configure it to have them, like this

17:51 Ensign Howard: And here is the DYO property form that draws the lines between swing highs and swing lows

17:52 Ensign Howard: The reason I am having this discussion is too often users see a pattern in hindsight and they want a signal on that pattern but do not realize the pattern is not yet firmly in place until subsequent bars are on the chart to verify it is not going to change, and then the signal is too late to take.

(Some do trade off the bar that leaves the swing marker behind.)