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Market structure: highs, lows and the break

Short answer: an uptrend makes higher highs and higher lows; a downtrend makes lower highs and lower lows. The trend stays intact until price closes past the last swing that defines it — the last higher low in an uptrend, the last lower high in a downtrend.

Marking the swings

A swing high is a peak with lower candles on both sides; a swing low is a trough with higher candles on both sides. Ignore the small wiggles — mark only the swings that stand out on your timeframe. Then read them in order: are the highs and lows stepping up, stepping down, or going sideways?

Break of structure (BOS)

A break of structure is a close past the last swing in the direction of the trend — a new higher high in an uptrend, a new lower low in a downtrend. It says the trend is still being pushed. A break on a strong candle with volume behind it carries more weight than one that barely closes through.

Change of character

When price closes past the swing that defined the trend in the other direction — under the last higher low in an uptrend — the structure has changed. It does not mean a new trend has started; it means the old one is no longer intact. The first retest of the broken swing often decides which way it goes.

When the last swing is far away

After a straight move there may be no swing near price at all — a coin that dropped 60% without a bounce has its last lower high at the top of the move. Then the useful line is the nearest level: a close back over the first ceiling is the first sign sellers are losing their grip, long before the trend formally breaks.

Every Sylvo market read opens with this structure — for example the Bitcoin and Ethereum pages.

Questions people ask

What is a higher low?

A swing low that sits above the previous swing low. Higher lows show buyers stepping in earlier each time, which is what keeps an uptrend intact.

What is the difference between BOS and CHoCH?

A break of structure (BOS) continues the trend: a new high in an uptrend. A change of character (CHoCH) breaks the swing that held the trend: a close under the last higher low in an uptrend.

Which timeframe should I read structure on?

Your own timeframe for the details, and one timeframe up for the direction. A 4-hour uptrend inside a daily downtrend is usually a bounce.

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General education, not financial advice.

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