Understanding Market Structure

Market structure refers to the pattern of highs and lows that price creates over time. Understanding it tells you who is in control — buyers or sellers — and where price is likely to go next.

Uptrend Structure: HH & HL

An uptrend creates Higher Highs (HH) and Higher Lows (HL). Each swing up exceeds the last, and each pullback finds support at a higher level. A structure break occurs when price makes a Lower Low (LL) — the uptrend may be over.

Downtrend Structure: LH & LL

A downtrend creates Lower Highs (LH) and Lower Lows (LL). Each bounce fails below the previous high. A structure break occurs when price makes a Higher High (HH) — the downtrend may be over.

Break of Structure (BOS)

A BOS occurs when price takes out the most recent swing high (uptrend) or swing low (downtrend). This confirms continuation. Nezsig often signals after a BOS with a retracement entry.

Change of Character (ChoCH)

A ChoCH is an early warning of potential reversal. In an uptrend, it occurs when price fails to make a new HH and breaks below the most recent HL. This is your first signal to reduce longs and prepare for possible reversal.