Higher highs, higher lows, lower highs, lower lows
Each new swing high and low is labelled by comparing it with the previous one: higher high (HH), higher low (HL), lower high (LH) and lower low (LL). The sequence of these labels makes the direction of the trend measurable.
What do the four labels describe?
On their own, swing highs and lows only show where price changed direction. To read the structure, we compare each new high with the previous high and each new low with the previous low. The abbreviations are widely used on charts.
The comparison is always between points of the same kind: high with high, low with low. Comparing a low with the previous high says nothing about the structure.
The labels
- HH (higher high): The new high is above the previous high.
- HL (higher low): The new low is above the previous low.
- LH (lower high): The new high is below the previous high.
- LL (lower low): The new low is below the previous low.
If a high or low is at almost the same level as the previous one, it counts as neither higher nor lower. Equal highs and lows like these often point to a sideways market.
How the sequence defines the trend
A single label does not set the trend. The trend is read from how the labels line up one after another.
Uptrend
Highs line up as HH and lows as HL. Each pullback ends above the previous low.
Downtrend
Highs line up as LH and lows as LL. Each bounce ends below the previous high.
Mixed or sideways
The labels mix, for example an HH followed by an LL, or highs and lows stay at the same levels. There is no clear direction.
How to label a chart
- Mark the significant swing highs and lows. Use points picked on the same timeframe with the same rule. Including minor swings muddles the labels for no reason.
- Compare each point with the previous one. Compare each high with the previous high and each low with the previous low, and label it HH, HL, LH or LL.
- Look at the last few labels. The last two highs and the last two lows together describe the current structure. Much older labels do not change today's structure.
- Note where the sequence breaks. In a rising structure the first LH or first LL, and in a falling structure the first HH or first HL, is where the structure starts to change.
What it shows, what it does not prove
What it shows
- Whether the structure on this timeframe has been rising, falling or sideways so far
- At which point the trend started to weaken
- A way to define the trend from price alone, without lines or indicators
What it does not prove
- That the next high or low will follow the same sequence
- That a single LH or LL reverses the trend on its own
- That the same sequence holds on other timeframes
The MarketLevelMap view
How it relates to zones
In a rising structure, higher lows often form on or inside a support zone. In a falling structure, lower highs similarly stay below or inside a resistance zone. The labels make it easier to see how zones work within a trend.
If the difference that makes a low "higher" or "lower" than the previous one is very small, both lows may sit inside the same zone. In that case it is sounder to read the points within a band than to treat a few units of difference as a change of direction.
Often confused with
For general information only. Not investment advice.Last updated: