Market Structure
Cornerstone concept of 6. The foundation underneath every TA layer.
What it is
Market structure is the sequence of swing highs and swing lows on a chart. The pattern of those swings tells you whether the market is trending or ranging, and whether the trend is intact or breaking.
The basic vocabulary:
- HH — Higher High: a swing high above the previous swing high.
- HL — Higher Low: a swing low above the previous swing low.
- LH — Lower High: a swing high below the previous swing high.
- LL — Lower Low: a swing low below the previous swing low.
What it tells you
- Bullish trend: HH + HL pattern (each swing higher than the last).
- Bearish trend: LH + LL pattern.
- Range: alternating, no clear direction.
- Transition: the trend has just flipped — caution warranted.
Visual example
When you see a chart making consistent HH-HL-HH-HL stair-stepping upward, that's a healthy bull trend. The moment you see an HL fail to form (i.e. the next pullback breaks below the prior HL), structure has broken to the downside — that's a Change of Character (CHoCH).
How to use it
- Confirm bias before acting on smaller-pattern signals. A bullish candle pattern in a bear-structure market has poor odds.
- Multi-timeframe alignment: structure on the 1h might say bull
while the 4h says bear. The MTF view at
/trading-intel/structureshows them side by side. - Watch for the flip: BOS / CHoCH events are emitted in the structure_events feed and on the chart overlay.
When NOT to trust it
- Low-liquidity tickers produce noisy swings; small N pivot detection is unreliable.
- Pre/post-market hours are excluded by default (RTH only at launch).
- Single-bar wicks shouldn't drive trend conclusions on a daily chart.
Related concepts
(More concept cards land over the first 30 days post-launch.)