Market Structure: How to Read Higher Highs, Lower Lows and the Break
Trend is a sequence
An uptrend is a series of higher highs (HH) and higher lows (HL). A downtrend is lower highs (LH) and lower lows (LL). Everything else is a range until proven otherwise.
Finding valid swing points
A swing high is a candle whose high is higher than the two candles either side of it. A swing low is the mirror. Mark them mechanically first — discretion comes later.
Fractal nature
Structure exists on every timeframe. The 4H can be making higher lows while the 5-minute prints a clean downtrend inside the pullback. Define your trading timeframe and its two neighbours, and stop there.
Break of structure vs. change of character
- Break of structure (BOS): price continues the trend by taking out the prior swing in the trend direction.
- Change of character (CHoCH): the first counter-trend break — an uptrend fails to make a higher low and then breaks the last higher low.
Reversal warning
A CHoCH is not a sell signal on its own. It tells you the prior trend is on hold. Wait for the new structure to confirm with at least one LH–LL pair.
A simple checklist
- What is the higher-timeframe trend (HH/HL or LH/LL)?
- Is price pulling back into a level, or breaking structure?
- Where is the invalidation — the swing point that, if broken, means I am wrong?