Market Structure — The Skeleton of Every Chart

If you open a chart and can ask yourself only one question — that question must be:

"What structure is the market in right now — uptrend, downtrend, or sideways?"

This is Market Structure — the foundation of everything in Price Action. If you cannot read structure, 100 indicators will not help.

There are only 3 structures — measured by "highs" and "lows"

Every chart is made of 2 things: - Swing High — a point where price rose to a peak and then fell - Swing Low — a point where price fell to a bottom and then rose

Structure 1 — Uptrend: Price makes Higher Highs (HH) — peaks above the previous peak — and Higher Lows (HL) — bottoms above the previous bottom. Simply: peaks rising, bottoms rising — like climbing stairs.

Structure 2 — Downtrend: Price makes Lower Highs (LH) — peaks below the previous peak — and Lower Lows (LL) — bottoms below the previous bottom. Peaks pressing down, bottoms pressing down — walking down the stairs.

Structure 3 — Range (sideways): Peaks at the same level, bottoms at the same level — price bounces inside a box.

The first iron rule of Price Action: trade with the structure

- Uptrend structure → look only for Buys (at the HL) - Downtrend structure → look only for Sells (at the LH) - Range structure → buy the lower edge, sell the upper edge, or do not trade at all

80% of beginners blow up because they trade against the structure — trying to "catch the top, catch the bottom" in a strong trend, which is like standing in front of a train.

Break of Structure (BOS) — the signal that the structure continues

In an uptrend — when price breaks above the previous Higher High = BOS = confirmation that the uptrend is still strong, the trend continues.

Change of Character (CHoCH) — the warning that the structure is changing

In a strong uptrend price has made HH-HL all along — then one day price makes a Lower Low for the first time (dropping below the previous bottom).

That is CHoCH — the first signal that buyers may be running out of steam, the uptrend may be ending. CHoCH does not mean the trend reverses immediately — but it is a "warning flag" to be careful and stop looking for Buys.

How to practise — open a blank chart, do these 3 steps every time: 1. Mark the 5-6 most recent clear swing highs and lows 2. Ask: are the peaks rising or falling? Are the bottoms rising or falling? 3. Sum it up in one word: up / down / sideways

Repeat daily on 20 charts — within 2 weeks you will read structure in a single second.

> Everything in Price Action is built on this foundation — if you only know which structure the market is in and trade with it, you are already ahead of 80% of beginners.

Next chapter — we find the point to enter within this structure.