Visual Guide to Chart Patterns

Swing Rule

If you are a swing trader, the swing rule could be better for you than going vegetarian, but probably not. In up trends, it accurately predicts when price is going to peak 80 percent of the time.

I found out about the swing rule when I read Secrets for Profiting in Bull and Bear Markets (Weinstein, 1988). This chapter discusses the technique and test results.

The inset of Exhibit 28.1 shows the idea behind the swing rule.

In an uptrend, price climbs in a series of rises and retraces. The swing rule helps predict how far price is going to rise. The drop from peak 1 to valley 2 should be the same as the rise from 1 to 3. In other words, ...