LESSON 3: Market Structure

Before you search for entries, you need to know where the market is moving. This is what market structure is for.

Market movement is not random. It leaves footprints. Every move creates highs and lows. We use them to define trend.

Uptrend

📈 Uptrend:

• Price makes a Higher High (HH) — new high above previous high
• Then retraces and forms Higher Low (HL) — new low above previous low
• Then makes another HH, and so on

As long as each HH and HL is higher, trend is bullish.

Downtrend

📉 Downtrend:

• Price makes a Lower High (LH) — new high below previous high
• Then a Lower Low (LL) — new low below previous low

As long as each LH and LL is lower, trend is bearish.

Structure Break

⚡️ Structure break:

If price in an uptrend falls below previous HL, this is the first warning of potential trend change.

But one break ≠ full reversal. Confirmation:

1. After break, price forms LH (retracement does not make a new HH)
2. After LH, price forms a new LL
3. Only then structure is officially bearish

Body Break, Not Wick

Which Timeframe to Use

There is no single universal answer — it depends on your style. Practical approach:

• 1D → macro direction
• 4H / 1H → local setup context
• 15M → refine entry

Always analyze top-down: 1D → 4H → 1H → 15M. Never the opposite.

How to Use in Trading

• Uptrend → look for longs on pullback to HL
• Downtrend → look for shorts on pullback to LH
• Structure break → avoid entries until confirmation
• HL and LH are known only after the fact — in real time pullback end is uncertain