Module 11: Understanding Market Structure
Key Takeaways
- Markets move in trends made of swing highs and lows.
- Higher highs + higher lows = uptrend.
- Lower highs + lower lows = downtrend.
- Reading structure tells you the trend before any indicator.
Higher highs
A higher high (HH) is a swing peak that is higher than the previous peak. A series of higher highs shows buyers are in control.
Higher lows
A higher low (HL) is a swing trough above the previous trough. It confirms buyers are stepping in earlier each time — a healthy uptrend.
Lower highs
A lower high (LH) is a peak below the previous peak, showing buyers are weakening.
Lower lows
A lower low (LL) is a trough below the previous trough — sellers in control, a downtrend.
Trend identification
Put it together: an uptrend = higher highs and higher lows. A downtrend = lower highs and lower lows. A range = roughly equal highs and lows, no clear direction. When higher highs stop forming and a lower low appears, structure is shifting — a possible trend change (you’ll formalise this as “break of structure” in Module 21).
Mark swing highs and lows on a clean chart before adding any indicators. Structure is the foundation everything else builds on.
Frequently Asked Questions
A swing high has lower candles on both sides; a swing low has higher candles on both sides. Zoom out to see them clearly.