Step by step
How to read it
- 1Higher highs and higher lows: an uptrend.
- 2The last higher low — the line the uptrend must hold.
- 3Price closes below it: the first lower low.
- 4A lower high follows. The structure has turned down.
Watch out
Common mistake
Trading against the structure because price “looks too high”. Structure changes when a swing breaks, not when price feels expensive.
In one line
Definition
The sequence of highs and lows that tells whether a market is trending up, trending down or ranging.
Check yourself
Check yourself
What first warns that an uptrend may be over?