Swings
are the price extremes or turning points that Retro-Trader uses to define trend
direction and trend reversal. An uptrend is a series of higher swing highs and
higher swing lows. A downtrend is a series of lower swing highs and lower swing
lows.
Note that in the e-Mini Nasdaq 5-minute chart at right the third swing high is lower than the previous, which by Retro-Trader rules would cause us to take profits and look for a reversal trade on the 15 minute chart. However the reversal was not confirmed by subsequent price action, instead putting in a higher low (#4) and resuming the up-trend. The 15 minute chart filtered out this false reversal and saved us from entering on the short side, instead getting us back in on the long side for the remainder of the up-trend. That's a good illustration of why Retro-Trader uses 5m for exits and 15m for entries.