Market structure · Lesson 3
Lower highs and lower lows
A brief rally can look like a recovery even while the broader downtrend continues.
A downtrend is commonly described by meaningful lower highs and lower lows. Sellers repeatedly prevent rallies from reclaiming prior important highs while price establishes lower lows. Traders should distinguish structural pivots from ordinary noise and avoid calling a reversal from one isolated break without considering the next reaction and the higher-timeframe context.
Imagine a rally stops below the previous meaningful high, followed by a fresh low. Buyers lifted price temporarily, but the sequence of lower highs and lower lows remained intact.
On a historical chart, mark a rally high and the following low. Explain whether they changed the structure or continued it.
Next in this series: Breaks, shifts and confirmation.
#TradingEducation #PriceAction #RiskManagement #TradingTurtle
Lower highs and lower lows
A brief rally can look like a recovery even while the broader downtrend continues.
A downtrend is commonly described by meaningful lower highs and lower lows. Sellers repeatedly prevent rallies from reclaiming prior important highs while price establishes lower lows. Traders should distinguish structural pivots from ordinary noise and avoid calling a reversal from one isolated break without considering the next reaction and the higher-timeframe context.
Imagine a rally stops below the previous meaningful high, followed by a fresh low. Buyers lifted price temporarily, but the sequence of lower highs and lower lows remained intact.
On a historical chart, mark a rally high and the following low. Explain whether they changed the structure or continued it.
Next in this series: Breaks, shifts and confirmation.
#TradingEducation #PriceAction #RiskManagement #TradingTurtle
