Market structure basics: reading highs, lows and trend
Price moves in swings. Market structure is the pattern those swings make. Reading it is the first step in most price-action strategies, because it tells you whether buyers or sellers are in control.
Uptrend: higher highs and higher lows
In an uptrend each swing high is above the last (HH) and each pullback ends above the previous low (HL). Buyers keep stepping in at higher prices.
Downtrend: lower highs and lower lows
In a downtrend each swing high is below the last (LH) and each push down ends below the previous low (LL). Sellers keep stepping in at lower prices.
A break of structure
When an uptrend makes a lower low, or a downtrend makes a higher high, the pattern is broken. That is often the first sign the trend may be changing. Wait for a candle to close beyond the level rather than reacting to a wick.
Use more than one timeframe
- Mark the trend on a higher timeframe such as 1H or 4H
- Look for entries on a lower one such as 15m
- Trade with the higher-timeframe direction while you are learning
Practise it on real charts
Reading structure is a skill you build by repetition. In a bar replay you can label the swings candle by candle, decide before the next candle appears, and check yourself afterwards. MEEYONA shows swing labels such as HH, HL, LH and LL on the chart to help you check your reading.
Frequently asked questions
What is a swing high?
A swing high is a candle high with lower highs on both sides. A swing low is the opposite. They are the turning points of the trend.
Which timeframe should I use?
Many traders read the trend on 1H or 4H and look for entries on 15m. Test what suits you in a replay.
Does market structure predict the future?
No. It describes what price has done and shows the side that was in control. Use stops, because any read can be wrong.