Course › Level 2 — How traders read a chart

Market structure (the simple version)

Markets move in swings — push up, pull back, push up again. The pattern of those swing points IS the trend, and watching them tells you when the trend is changing.

The one signal worth learning first

In an uptrend, every pullback stops at a higher low. The moment price breaks below the most recent higher low, the pattern is broken — buyers failed for the first time. Traders call this a break of structure, and it's the earliest honest warning that the trend may be turning.

• Uptrend + price breaks below the last higher low → up-move is in doubt
• Downtrend + price breaks above the last lower high → down-move is in doubt

What to do with this as a beginner

Nothing fancy: stop taking new trades in the old direction once structure breaks. You don't have to catch the reversal — just stop feeding the move that's ending. Preserving money you didn't lose counts the same as money you made.

Mark lesson complete