2.3Market Structure
- ·Higher highs, higher lows, lower highs, lower lows
- ·How structure describes direction
- ·What consolidation looks like
- ·Higher High — HH
- ·Higher Low — HL
- ·Lower High — LH
- ·Lower Low — LL
An example bullish structure:
An example bearish structure:
A market can also move sideways. This is called a range or consolidation.
Structure describes what price is actually doing. Do not begin with an indicator. Begin with price.
Structure before indicators.
Price making successive higher lows while an oscillator reads overbought is still, structurally, an uptrend.
Examples use historical or illustrative data only. They are not live market signals.
On a clean chart, mark the last six structural points and label each HH, HL, LH or LL.
A sequence of higher highs and higher lows describes:
What should be established before applying an indicator?
- 01Structure is defined by the sequence of highs and lows.
- 02Sideways movement is a regime, not a failure of analysis.
- 03Read price before reading tools.
Educational content only. Nothing here is financial advice or a recommendation to trade. Trading involves risk of loss, results vary between individuals, and past performance does not indicate future results. Only capital you can afford to lose should be exposed to market risk.