I’ve been experimenting with the different options available in the Gann Swing Charts and I can’t get it to behave exactly as I have been taught, and also think, it should.
The issue is around outside bars. I have watched Mathew’s 2 part video blog about Gann Swings and it is the explanation of the treatment of the outside bar that I don’t quite agree with. This is not to say that the current treatment is wrong but just that there is a different method that yields a different swing chart, which makes more sense to me.
As I undestand it, Optuma currently includes a swing high and a swing low on the oustide bar which results inthe swing chart cutting across from the low (or high) of the neighbouring bar rather than extending down (or up) to the bottom (or top) of the outside bar - see screenshot 1 attached.
I was taught that an outside bar is ignored as one cannot determine a potential change in trend until the next higher or lower bar is formed.
In the first highlighted area in screenshot 1, the subsequent bar is lower, so the swing should have carried on across the top of the outside bar and then swung down to the lower bar ultimately ending up at the 1826 level.
The second highlighted area is a little trickier as there is an outside, an inside, another outside before a lower bar forms, confirming the previously established turn down from the lower bar prior to the cluster of outsides and insides. Heere the swing should have started at 2342 and swung down to 2004 in one swing, not two.
The third and fourth highlights are similar.
Introducing an extra swing seems to be adding ‘noise’ back into the swing chart, which is countrary to the whole purpose of a swing chart which is to iron out the noise.
The other impact is on the quoted ranges which are, in essence, ruined by the intermediate swing on the same (outside) bar and by not extending up to the high or low of the outside bar. I don’t understand how a swing chart cannot swing to the high (or low) point.
Screenshots 2 and 3 show another, clearer example with the swing as drawn by Optuma and with how I would draw it by hand shown by the changes in yellow. The settings for the swing chart are: 1 bar, Use Next Bar, Cluster=False, Use Breakout=False.
So first off, I am interested to hear Optuma’s and others thoughts and secondly, is there a possibility to add a further option to the swing chart to enable Optuma to treat the outside bars as I think they should be.
Thanks in advance.