Swing Wave Detection - Amit

Overview
The Swing Wave Detection indicator is a technical analysis tool designed to identify and visualize swing highs and lows in price action. It operates on two distinct timeframes: major swings for longer-term trend analysis and minor swings for shorter-term price movements.

Purpose
This indicator serves multiple analytical purposes:

Trend Analysis: Identifies significant price turning points for trend direction assessment
Support/Resistance Levels: Swing points often act as future support or resistance zones
Entry/Exit Signals: Provides potential trade entry and exit points based on swing formations
Market Structure Analysis: Helps traders understand the underlying market structure through swing patterns

ATR-Based Adjustment

Uses Average True Range (ATR) with a 9-period calculation
Applies a 20% multiplier to ATR for swing level adjustment
Adds ATR to swing highs and subtracts from swing lows to account for volatility

Usage Guidelines
Optimal Timeframes

Major Swings: Best suited for daily, 4-hour, or 1-hour charts
Minor Swings: Effective on 15-minute, 5-minute, or 1-minute charts

Interpretation

Swing Highs: Potential resistance levels or short entry points
Swing Lows: Potential support levels or long entry points
Pattern Recognition: Connect swings to identify trend lines, channels, and chart patterns

Limitations

Lagging Nature: Swings are confirmed with a delay equal to the swing period
False Signals: May generate signals in ranging markets
Parameter Sensitivity: Results vary significantly with period adjustments

Conclusion
The Swing Wave Detection indicator provides a systematic approach to identifying price swing points across multiple timeframes. Its dual-period design allows for comprehensive market structure analysis while maintaining computational efficiency. The indicator is best used as part of a broader technical analysis framework rather than a standalone trading tool.