Market structure
Market structure is the pattern of price highs and lows: HH, HL, LH, LL. It shows whether there is a trend and when that trend may be breaking.
How it works
The labels mean: HH is a higher high, HL a higher low, LH a lower high and LL a lower low. An uptrend is a chain of HH and HL. A downtrend is a chain of LH and LL. When highs and lows sit at about the same level, the market is ranging (moving sideways).
When price continues the trend and makes a new extreme, traders call it a BOS (break of structure). When price in an uptrend breaks below the last HL for the first time, it is a CHoCH (change of character), an early sign the trend may turn. It is not a guarantee: often it is just a deep pullback.
Structure depends on the timeframe: the 15-minute chart can fall while the daily rises. Read the higher timeframe first to see the overall trend, then use a lower one to look for an entry.
BTC peaks at 62,000, pulls back to 59,000, rallies to 64,000 and pulls back to 61,000. That is HH and HL, a bullish structure. As long as price holds above 61,000 the structure is intact. A candle close below 61,000 would be the first sign of a break (CHoCH), not proof of a reversal.
A common mistake is seeing a structure break in every small wiggle. Traders mark dozens of highs and lows on the 1-minute chart and flip positions on noise. Pick one working timeframe, mark only clear swings (highs and lows that led to a real move) and wait for a candle close beyond the level, not just a wick poking through.
Questions and answers
What is market structure in simple terms?
It is how price forms highs and lows. Each one higher means up, each one lower means down, and roughly equal ones mean sideways.
What do BOS and CHoCH mean?
BOS is a break of structure in the trend direction, so the trend continues. CHoCH is the first break against the trend, an early hint of a possible reversal.
Which timeframe should I use for market structure?
Start with a higher one (daily or 4-hour) for the overall trend. Use a lower timeframe for the entry, but do not trade against the higher-timeframe structure.
Related terms
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Updated: 2026-10-19