Charts & technicals
What is market structure?
Market structure is the sequence of highs and lows: higher highs with higher lows is an uptrend, lower highs with lower lows is a downtrend, and anything else is a range. It underpins every other tool, because a pattern or an indicator only means something in the context of the structure it appears in.
The three states
- Uptrend. Higher highs and higher lows. Pullbacks are opportunities until a low breaks.
- Downtrend. Lower highs and lower lows. Bounces are exits, not entries, until a high breaks.
- Range. Neither, and most of the time this is where price is. Levels matter here; trend tools do not.
The break of structure
A trend changes when the sequence changes: an uptrend that fails to make a higher high and then takes out its last higher low is no longer an uptrend. That is a definition, not a prediction, and its value is that it happens at a specific price you can identify beforehand rather than at a moment you feel.
Why it matters more than patterns
The same pattern means opposite things in different structures. A bullish formation inside a downtrend against a clear lower high is a continuation setup for the other side. Read structure first and the pattern second, and most of the contradictory signals people complain about resolve themselves.
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