Average Swing Value Breakout Strategy

Discover a breakout trading strategy based on Larry Williams' Average Swing Value. Uses daily price action to identify potential long and short entries on index

Published · Updated · Methodology: Technical Indicators

Part of: Breakout Trading

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: Daily (implied by 'close of yesterday', 'break today')
  • Markets: Indexes (mentioned as mean reverting)

Indicators used

  • Average Swing Value

Source video

Decoded from: Long Term Secrets to Short Term Trading | Larry Williams by Ali Casey | StatOasis — watch the original

Key timestamps:

  • 0:18 - Introduction to breakout strategy based on Larry Williams' Average Swing Value
  • 0:50 - Explanation of strategy tweak
  • 1:00 - How the strategy works for long entries
  • 1:10 - Calculation of average swing high value
  • 1:35 - Long entry condition
  • 1:45 - How the strategy works for short entries
  • 2:00 - Calculation of average swing low value
  • 2:20 - Short entry condition

Strategy overview

Breakout trading buys or sells when price pushes past a reference level that is expected to matter. What distinguishes this entry is where that level comes from: rather than a session range, a prior high, or a drawn structure, the trigger is a *computed* one — a distance derived from how much the market has actually been swinging in recent bars, projected off a reference price. The level moves with volatility instead of sitting still on the chart, so the same rule asks for a bigger push in an active market and a smaller one in a quiet market.

The idea traces back to Larry Williams' *Long Term Secrets to Short Term Trading*, and this entry decodes a walkthrough of it by Ali Casey on the StatOasis channel — a short, stats-oriented breakdown rather than a discretionary chart lesson. Two things about the video's framing are worth noting. First, it does not present Williams' formulation untouched: around the 0:50 mark it explicitly introduces a tweak to the original calculation, so this is a variant rather than a textbook reproduction. Second, it walks through the long case and the short case separately instead of treating one as the mirror of the other — a distinction that matters for any threshold built from directional price movement, since up-swings and down-swings do not have to be measured the same way. The cadence discussed is daily: the prior session sets the reference, and the break is expected to occur during the current one.

This page covers the concept and the source video's presentation of it; a full rule-by-rule breakdown has not been extracted for this entry. Anyone building on the idea should keep in mind that volatility-scaled triggers inherit their character from the lookback used to measure swing size — too short and the threshold chases noise, too long and it stops adapting — which is why a concept like this is best evaluated on historical daily data before it is traded.

Topics

average swing value strategy · breakout strategy · trading strategy · larry williams strategy · technical indicators · daily trading strategy · indexes trading strategy · price action strategy · swing trading · tradingview strategy · short trading strategy · long trading strategy

Frequently asked questions

What is the Average Swing Value?

It is a volatility measure popularized by Larry Williams in *Long Term Secrets to Short Term Trading*: an average of how far price has recently swung, used to set a breakout threshold at a distance that scales with current market activity rather than at a fixed chart level.

How is a volatility-scaled breakout different from a range breakout?

A range breakout uses a level that already exists on the chart — a session high, a prior day's extreme, an opening range. A volatility-scaled breakout calculates the distance instead, so the trigger widens when the market is moving fast and tightens when it is quiet.

Does this strategy follow Larry Williams' original calculation?

Not exactly. The source video presents a modified version and flags the change explicitly early in the walkthrough, so it should be treated as a variant of the Average Swing Value concept rather than a direct implementation of the published formula.

What timeframe does this version use?

The walkthrough is framed on daily bars — the previous session provides the reference and the breakout is evaluated on the current day — rather than on the intraday charts more common in breakout content.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

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