Swing Overlay

Last modified 13:19, 5 Nov 2012

Swing Overlay

The Swing Overlay indicator superimposes a swing chart over the underlying price chart.

This function provides an opportunity to study swing chart construction rules. The price movements in the price chart that result in changes in direction of the swing chart can be directly compared with the swings plotted in the overlay.


The ABC methodology used to plot the one-day swing chart overlay is explained on pages 77-83 of the Smarter Starter Pack manual (3rd Edition).

Note - To display the Swing Chart on its own, refer to the Swing Indicator help topic.

Swing Overlay Properties settings

To change the manner in which a swing is detected, double-left mouse-click on the Swing Overlay to open the Swing Overlay Properties dialog box:


The settings affecting the calculation of the swing overlay are all on the Parameters tab.

Swing Type

There are two swing types available in the drop down box - Time or Price/Points.

Different parameters are required for each type:


Users set the number of Periods (intervals) by which the swing is calculated. The default is one.


Users set the number of Points by which the swing is calculated. The default is one (1.0), but users should manually set this to the point size appropriate for the current symbol, for example 0.01 for a security trading at $9.75, and then set the desired value, for example 0.05.


Multi-interval swing indicators can be created based on the same price chart.

The Point/Periods number indicates the number of trading periods (intervals) that must satisfy the swing chart construction criteria before a change in direction is registered. The most popular are 3-day and weekly swing charts.

Extending the period over which the swings are calculated can have the effect of smoothing the Swing Overlay.

For example, altering the 1-day period of the previous example to 3-days results in a more distinct trend display:


Note how the general trend remains the same, but that some intervening swings have been removed.

For more information on multi-interval swing charts, refer to pages 59-65 of the No. 1 Trading Plan (3rd Edition).

Swing Compression

Use the drop-down menu to set the Compression to Daily, Weekly or Monthly.

The Compression can also be used to smooth the swings.

Compression works in tandem with Points/Periods setting, so a change to one may require a compensating change to the other. For example, if Points/Periods is set to 3 and the Compression is changed from Daily to Weekly, the Points/Periods will have to be set to 1 in order to get a useful result because the period will be one week, rather than three weeks.

Gann's Exception Rule

Gann's Exception Rule applied to multi-interval Time Swing calculations, i.e. periods greater than one.

For top swings this rule applies where there is an interval's high that exceeds the last swing top, regardless of the fact that the high occurred within the time period set to calculate the swing chart (i.e. a large one day move may turn a 3 day swing chart). For more information, go to the Gann's Exception Rule topic.

When the swing detection settings have been properly altered, click OK to apply the new setting to the Hi-Lite.

Display Settings tabbed pages

The color, weight, font, style, etc of the swing indicator and its scale can be set in the Plots, Scale Settings and Scale Appearance tabbed pages of the Swing Indicator Properties dialog box.


All of the new setting can be saved as the new default by clicking the Defaults button.

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