Market structure
The pattern of highs and lows that shows whether a market is trending, ranging or turning.
Full explanation
Market structure is the framework created by successive highs and lows. Higher highs and higher lows describe an uptrend; lower highs and lower lows describe a downtrend; broadly level highs and lows describe a range.
Reading structure is a way of describing what price has actually done without relying on indicators. It answers the first question any plan needs: what kind of market am I in today?
Structure changes when the pattern breaks — for example, when an uptrend fails to make a new high and then closes below the previous low. That is the earliest objective sign that control may be changing hands.
Why traders watch it
Strategy selection depends on structure. Trend techniques need a trend; range techniques need a range. Applying the wrong one is a common reason a technically sound approach loses money.
Every Trading Plan starts by establishing structure and context before it discusses events or opportunities, so the guidance matches the market you are actually in.
Trading considerations
- Identify structure before looking for entries.
- A single break does not confirm a new trend — look for the pattern to repeat.
- Use a higher timeframe for structure and a lower one for timing.
Educational guidance only — never a trading signal or recommendation.
Related indicators
Asian session
The overnight session driven by Tokyo, Sydney, Hong Kong and Singapore, typically quieter and range-bound.
Clear direction
When one side is plainly in control: price makes progress one way and pullbacks are shallow.
Consolidation
A pause in which price moves tightly sideways, often after a strong move, while the market absorbs it.
First spike
The sharp, immediate move in the seconds after a release or a level breaks — usually the least reliable part of the whole move.
High-impact news
A scheduled release with a strong record of moving markets sharply — for example inflation, employment data or an interest-rate decision.
Holding a move
When price stays at its new level after a move instead of drifting back — the sign that the move was accepted.