Highs, Lows and the Shape of a TrendMarket Structure

Swing highs and swing lows are the skeleton of every chart. Learn to mark them, and "trend" stops being a feeling. This free lesson covers: Why structure comes first, What a swing high is, Name it, And a swing low, Which is it?, What an uptrend actually is, Read the sequence, And a downtrend, When only half agrees, Put it together.

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Why structure comes first

Most people decide a market is "trending up" by looking at it and getting a feeling. Structure replaces the feeling with something you can point at.

Once you can mark swing highs and lows, a trend has a definition — and more importantly, a condition that ends it.

Going deeper

More on highs, lows and the shape of a trend

Structure analysis long predates the current price-action vocabulary. Charles Dow described trends as sequences of successively higher peaks and troughs in the 1890s, and the definition has not needed changing since.

What makes it valuable is that it is objective. Two people marking swing points on the same chart will largely agree — which is not true of most chart interpretation.

Common mistakes3
  • Marking every minor wiggle as a swing point. If everything is a swing, the structure tells you nothing.
  • Using different sensitivity on different charts, so a market looks trending on one and ranging on another purely from how you marked it.
  • Declaring a trend from highs alone without checking the lows.
From experience2
  • Pick a consistent rule for what counts as a swing point — a candle higher than the two either side is a common one — and apply it everywhere.
  • Mark structure on a higher timeframe first and carry those levels down. Structure found on a 5-minute chart alone is mostly noise.
Questions people ask2

How many candles either side make a swing high?

There is no universal answer. One either side is the loosest common definition, two or three gives fewer and more significant points. Consistency matters more than the specific number.

What if highs and lows disagree?

Higher highs with lower lows is an expanding, unstable market. That is genuine information — usually that it should be left alone.