Market structure

Market structure is the vocabulary for describing the sequence of highs and lows a chart has already printed, without reference to any indicator. A series in which each successive high sits above the previous high, and each successive low above the previous low, is described as an uptrend; the mirror sequence, with each high and each low lower than the last, is described as a downtrend. When the sequence stops holding — a low that undercuts the previous low inside a run of higher highs — the structure is said to have changed, and the chart is described as having no clear direction until a new sequence establishes itself. The whole vocabulary is descriptive and backward-looking. Whether a given swing counts as a high or a low depends on how much movement the reader requires before calling it one, so two people looking at the same chart on the same timeframe can mark the structure differently. Nothing in the sequence says what comes next; it is a way of summarising what has happened, not a forecast.