Description
PZ Swing Trading is the first indicator designed to detect swing movements that follow the trend, as well as possible reversal swings. It is based on the classic swing trading method described in many trading books. The indicator looks at price and time data to determine the general trend direction and identify when the market is overbought or oversold and ready to move in the opposite direction.
- Helps you profit from swing movements without false signals (whipsaws)
- Always shows the direction of the trend
- Displays a colored price band that marks the opportunity baseline
- Shows possible reversal swings using colored dashes
- Evaluates and displays its own signal quality and performance
- Includes a multi-timeframe dashboard
- Customizable trend and swing settings
- Sends alerts by email, sound, push, or on-screen
- Signals do not repaint or change after appearing
What is Swing Trading
Swing trading is a trading method that tries to catch price moves lasting from one day to a week, though some trades may stay open longer. Swing traders use technical analysis to buy when the price is weak and sell when it is strong. They wait patiently for good opportunities. This is because it makes more sense to buy after a price has dropped, rather than buying during a sell-off.
The Opportunity Baseline
Research on price history shows that swing-tradable markets tend to move up and down around a baseline price band. This band is shown on the chart as a colored area, calculated using the Average True Range (ATR).
Swing traders use this band to find trade opportunities. When the price touches the band:
- If the overall direction is up, they may buy
- If the direction is down, they may sell
Swing traders do not aim to catch the exact top or bottom. Instead, they try to enter around the baseline, wait for price confirmation, and take profits during the next swing. Things become more complex when a strong uptrend or downtrend is happening in the current or higher timeframe. For example:
- In an uptrend, the trader might buy even if the price falls below the baseline, expecting it to rise again.
- In a downtrend, the trader might short even if the price rises above the baseline, expecting it to fall again.
To help with these situations, the indicator shows reversal signals as colored dashes on the chart.
Input Parameters
- Trend period – Sets how sensitive the indicator is to trend changes. A larger value finds longer trends. A smaller value detects shorter trends more quickly.
- Baseline period – Controls how wide the opportunity baseline is. It should always be smaller than the trend period. A higher value gives a wider baseline; a smaller value gives a tighter one.
- Display swing signals – Turns on arrows showing when price returns to the baseline and breaks away from it.
- Display corrections – Turns on colored dashes showing when the trend starts to correct.
- Display the dashboard – Turns on the multi-timeframe dashboard on the chart.
- Display statistics – Turns on the performance statistics panel on the chart.
- Drawing Settings – Lets you choose your own colors and sizes for arrows and reversal dashes.
- Alerts – Turns on alerts by email, sound, push notification, or on-screen when signals appear.
