Trends and Market Structure — Understanding Price Charts
A swing high is a peak where price rises, then turns down. A swing low is a trough where price falls, then turns up. Identifying these turning points is…
Swing Highs and Swing Lows
A swing high is a peak where price rises, then turns down. A swing low is a trough where price falls, then turns up. Identifying these turning points is the foundation of reading market structure.
[Read the lesson: Trends and Market Structure](/learn-to-trade/understanding-price-charts/trends-and-market-structure)
Defining an Uptrend and a Downtrend
An uptrend is generally defined as a series of higher highs and higher swing lows — each peak and each trough sits above the previous one. A downtrend is the mirror image: a series of lower highs and lower swing lows.
When price isn't making a clear series of higher or lower swings, and instead bounces between a fairly stable ceiling and floor, that's typically called a range or sideways market.
**Spotting an Uptrend:** Suppose AUD/USD prints swing lows at 0.6500, then 0.6540, then 0.6580 — each one higher than the last — while its swing highs move from 0.6600 to 0.6650 to 0.6700. Both the highs and the lows are climbing, which is the textbook definition of an uptrend.
[Read the lesson: Trends and Market Structure](/learn-to-trade/understanding-price-charts/trends-and-market-structure)
Market Structure and Trend Changes
Market structure refers to this ongoing pattern of swing highs and lows that tells you whether a market is trending or ranging. A potential early warning that a trend is weakening is when price fails to make a new higher high (in an uptrend) or fails to make a new lower low (in a downtrend).
A more decisive structural shift often discussed by traders is when price breaks below the most recent higher low in an uptrend (or above the most recent lower high in a downtrend) — though this is a signal to pay closer attention, not an automatic certainty that the trend has reversed.
[Read the lesson: Trends and Market Structure](/learn-to-trade/understanding-price-charts/trends-and-market-structure)
Trends Don't Move in Straight Lines
Even strong trends include pullbacks — temporary moves against the dominant direction. Confusing a normal pullback for a full trend reversal is a common beginner mistake, which is one reason multi-timeframe analysis and patience are valuable.
[Read the lesson: Trends and Market Structure](/learn-to-trade/understanding-price-charts/trends-and-market-structure)