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Higher highs and higher lows

The structural definition of an uptrend: each swing high and swing low exceeds the previous one.

Market structure is read from swing points. In an uptrend each pullback bottoms above the last one (higher low) and each rally tops above the last one (higher high). The first lower low is the earliest sign the trend is changing.

This is the basis of most price-action trading and of terms like market structure shift or break of structure in order-block-style analysis.

Example: swing lows at $20, $22, $25 and swing highs at $23, $26, $29 form a clean uptrend. A drop to $24, below the $25 low, is the first break in that structure.

Related: trend, pullback, order-block, range

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Trend structure: higher highs against lower lowsTwo zigzag price paths side by side; the left one steps upward with each peak and trough above the last, the right one steps downward with each peak and trough below the last.UPTRENDhigher highs, higher lowsHHHHHHHLHLHLDOWNTRENDlower highs, lower lowsLHLHLHLLLLLLHH higher high, HL higher low, LH lower high, LL lower low.
How a trend is built. A trend is just a sequence of turning points. While each peak and each dip sits above the one before it the market is trending up; once both start landing below the previous ones the structure has turned down.

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