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1988issue C121-3

Remaining life on a percent-filtered swing chart

A percent trend-filter can drop small swings and leave a swing-chart that is kin to point-and-figure. Once a swing is qualified, remaining-life asks how much unused travel is still left, and how sharply that remainder shrinks when the swing fights the primary trend.

  • A percent trend-filter drops any swing smaller than a stated threshold, illustrated as 5 percent on market averages and 10 percent on individual stocks, and the cleaned path is treated as kin to a point-and-figure chart.
  • Qualified advances and declines are labeled as percent-swings by resetting the swing low to 100, so a rise from 100 to 130 and a later fall from 130 to 100 both receive a 30 percent tag.
  • After a swing clears the filter, its direction is used as an indicator because such swings historically tend to continue. Remaining-life is the extra percent travel observed, on average, before a reversal larger than the filter.
  • Remaining-life was similar for upswings and downswings, but primary-trend-alignment changed it substantially: with-trend swings kept more unused travel than swings that fought the prevailing bull or bear market.
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Current trackSwing chart34 readingsPoint and figure chart37 readingsTrend filter137 readings

A percent filter builds the swing-chart

A percent trend-filter can drop any swing smaller than a stated threshold. The archive illustrates that gate as 5 percent on market averages and 10 percent on individual stocks.

The cleaned record is a swing-chart. It keeps only turning points large enough to pass the chosen percent threshold and drops the smaller vibrations between those turns. The trend-filter withholds a reversal from the swing record until the move exceeds that stated size, so remaining-life estimates use only qualified swings.

The same ignore rule as point-and-figure

The cleaned swing path is treated as kin to a point-and-figure chart. Point-and-figure likewise suppresses moves smaller than a chosen box or point size and produces a cleaned sequence of advances and declines.

How a percent-swing is labeled

Rising and falling swings are put on the same scale by treating the swing low as 100. A move from 100 to 130 and a later move from 130 to 100 are both labeled 30 percent, even though the decline is about 23 percent from the high. That shared tag is the percent-swing of the qualified advance or decline.

Direction after the filter

After a swing clears the filter and is no longer treated as chart noise, its direction is used as an indicator because such swings historically tend to continue.

Remaining-life on qualified swings

Remaining-life is the additional percent travel historically observed, on average, before a reversal larger than the filter ends the current swing.

Remaining swing size was estimated from a historical file of 785 industrial-average swings of 5 percent or more running back to 1897. In that file, a swing already measuring 7 percent continued, on average, to 12.3 percent before a reversal larger than the 5 percent filter.

Primary-trend-alignment changes the remainder

Remaining-size curves for upswings and downswings were not significantly different from each other. Remaining size did differ substantially by primary-trend-alignment, meaning whether the current swing traveled with or against the prevailing bull or bear market. That split includes secondary reactions and bear-market rallies.

In a rising primary market, a 7 percent advance averaged continuation to 14 percent. A decline in the same regime averaged only 4 percent of additional travel, to about 11 percent.

Remaining travel on a 5% DJIA swing after it has already run

Once a Dow swing clears the 5% filter, unused travel shrinks as more of the move is already behind you. At 7% completed the average path still reached 12.3% before a 5% reversal; the curve is read from Merrill's single-line expectation chart (Figure 2), built on 785 DJIA swings from 1897.
Once a Dow swing clears the 5% filter, unused travel shrinks as more of the move is already behind you. At 7% completed the average path still reached 12.3% before a 5% reversal; the curve is read from Merrill's single-line expectation chart (Figure 2), built on 785 DJIA swings from 1897.DJIA · swing

Y is remaining life in percent (expected terminal size minus the observed completed size). The 7%→12.3% pair is stated in the article; other points are digitized from Figure 2. Filter is 5% on the DJIA. Sample is 785 swings from 1897.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
3 of 30 in the Swing chart track
19911-3 pp.Next on Swing chartRanking turning points with percentage swing filtersNested highs and lows still require a size rule before a turn can define an important level or a higher wave class.
All readings on this track · 30 readings
  1. 1982Constructing range resistance from harmonic swing divisions
  2. 1984Gold swing chart: failed highs, wash-out, and a boxed pivot range
  3. 1988Remaining life on a percent-filtered swing chart
  4. 1991Ranking turning points with percentage swing filters
  5. 1991Five-count swing-chart construction and break rules
  6. 1992Constructing the Gann quarterly swing from the prior quarter's intraday range
  7. 1992Audit quarterly swing breakouts with a slower average cross
  8. 1992Weekly swing invalidation and the trailing stop
  9. 1992Quarterly swing chart construction and trend duration
  10. 1998A two-bar swing is unfinished until it names the stop
  11. 1999Multiple time-frame swing-channel trade setups
  12. 1999Separate two-bar swing direction from peak-valley trend
  13. 2000Constructing peak-trough swing reversals
  14. 2002Swing charts as shared grammar for trading mentorship
  15. 2002Confirming the last leg of a zigzag trend filter
  16. 2004When a late trend bends: test the pause before sizing a reversal
  17. 2006Crude oil swing counts and cycle clusters
  18. 2006When late rallies flatten: a swing-chart classroom
  19. 2006Relocating trading certainty to the decision process
  20. 2008Swing highs, bar-count pace, and the cost-price stop
  21. 2010Constructing suspect versus confirmed swing trends
  22. 2010Constructing swing charts from clear bar ranges
  23. 2010Building price force maps from two-bar swings
  24. 2010Clear-method swing-chart construction
  25. 2011Treat a squared-chart swing forecast as a same-day hypothesis
  26. 2012Cycle mode construction from aligned bandpass swing waves
  27. 2013Stacked swing lows and breakout retrace tests
  28. 2015Building swing charts from perceptually important points
  29. 2015Construct a zztop from perceptually important points
  30. 2016Isolating swings with percentage trend thresholds
By fieldTrend and channels181 readingsBy year198866 readings
All 34 readings tagged Swing chart
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