Swing highs and swing lows
Prices rarely move in a straight line. They rise, pull back, rise again. Each turning point at the top is a swing high; each turning point at the bottom is a swing low. Market structure is simply how these swings compare with the ones before them.
The four labels
- 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.
Uptrend, downtrend and range
- Uptrend: a series of higher highs and higher lows (HH, HL, HH, HL…).
- Downtrend: a series of lower highs and lower lows (LH, LL, LH, LL…).
- Range (sideways): highs and lows stay roughly level between a ceiling and a floor.
Why the timeframe matters
The same stock can show an uptrend on a daily chart and a downtrend on a 5-minute chart. Always say which timeframe you are reading. Small, noisy swings on very short charts can make the labels change often.
Limits
Market structure describes what price has already done. It does not predict the next move: a run of higher highs can end at any time. Read it together with volume, VWAP and key levels. See also break of structure and change of character.