Failure Swings

Failure Swings
Failure swings are independent of price action, and are formed solely on the RSI chart. According to Wilder, they provide strong indications of an impending reversal. A bullish failure swing takes place when RSI moves below 30 (oversold), then bounces up above it, pulls back, but holds above the oversold line and then breaks its prior high. A bearish failure swing forms when RSI moves above 70 (overbought), pulls back, forms a lower high below the overbought line, and then breaks its prior low.

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