Collectible card · Common
Market structure
The sequence of swing highs and lows. Higher highs + higher lows (HH/HL) = uptrend. Lower highs + lower lows (LH/LL) = downtrend.
Why it works
Structure is the skeleton of the chart: it tells you who is in control right now and where that control would be lost (the last swing).
How to use it
Mark the last swing high and low. Buy pullbacks toward a higher low in an uptrend; place the stop beyond that swing, where your idea is proven wrong.
The typical mistake
Putting the stop in the middle of nowhere instead of beyond the swing that invalidates the trade.
FAQ
What is Structure in trading?
The sequence of swing highs and lows. Higher highs + higher lows (HH/HL) = uptrend. Lower highs + lower lows (LH/LL) = downtrend.
How do you trade Structure?
Mark the last swing high and low. Buy pullbacks toward a higher low in an uptrend; place the stop beyond that swing, where your idea is proven wrong.