Market Structure Basics (HH, HL, LH, LL)

Market structure is the simplest and most accurate way to read trend direction. If you can identify HH, HL, LH, and LL, you can trade without indicators.

1. The Four Building Blocks

Higher High (HH)

Price breaks above the previous swing high. This signals buyers are in control.

Higher Low (HL)

Price pulls back but stays above the last low. Buyers defended the dip.

Lower High (LH)

Price bounces upward but fails to reach the previous high. Sellers are showing strength.

Lower Low (LL)

Price breaks below the last swing low. Sellers take control.

2. How Trends Form

Uptrend = HH + HL

Every push up makes a new high (HH). Every pullback respects a higher low (HL).

Downtrend = LH + LL

Every bounce fails lower (LH). Every drop breaks a low (LL).

That’s it — real trend analysis is literally two patterns.

3. What Breaks a Trend?

• An uptrend breaks when a HL fails and becomes a LL
• A downtrend breaks when a LH fails and becomes a HH

The moment structure breaks, you stop thinking trend continuation and start thinking reversal or chop.

4. How to Use Structure in Real Trading

For Entries:

• Buy pullbacks to HL in an uptrend
• Sell pops to LH in a downtrend

For Exits:

• Exit longs if HL breaks
• Exit shorts if LH breaks

For Avoiding Chop:

If price is not making clear HH/HL or LH/LL, skip it. Chop destroys accounts.

5. Why This Beats Indicators

Indicators lag. Structure is real-time. Big funds trade structure — not RSI, not MACD, not trend magic.