Market structure

When does a trend count as changed?

An uptrend counts as broken when price closes below the last important higher low. A first lower high can show the structure weakening; to speak of a new downtrend, a sequence of lower highs and lower lows is usually needed.

The orange band marks the zone of the last important higher low and the orange dot the close below it. The green part shows the rising structure, the neutral-coloured part the weakening and the red part what follows the break.

The reference point

A trend is defined by the sequence of highs and lows, so whether it has changed is measured from the same sequence. In an uptrend the reference is the last important higher low (HL): the low that launched the latest higher high (HH). In a downtrend the reference is the last important lower high (LH).

As long as price stays above that reference, even sharp declines can be read as pullbacks inside the uptrend. Losing the reference means the structure can no longer be called rising.

An uptrend turning into a downtrend usually shows over several stages, not in a single candle. The stages below apply the other way round for a downtrend.

The stages of a change

No new high. Price fails to get above the last high and forms a lower high (LH). This can show the rise losing strength, but the trend is not broken yet.
A close below the last important higher low. Price closes below the last important HL. The rising structure no longer holds.
The bounce stays below the old low. Even if price bounces, it stays below the zone of the lost low and forms another LH.
A lower low forms. Price falls below the previous low and makes a lower low (LL). The LH and LL sequence can be read as confirming a new downtrend.

Weakened, broken, confirmed

These three states are often confused. The difference is which point has been lost.

Structure weakened

A first LH has formed, or price wicked towards the last important low, but the close stayed above it. The rising structure still holds.

Structure broken

A close below the last important HL has come. The uptrend no longer holds, but the new direction is not clear yet; price may also turn sideways.

New downtrend confirmed

After the break, at least one LH and one LL have formed. The structure can now be read as a downtrend.

The close or the wick?

A wick below the last important low does not break the structure if the close stays above it. It often shows the low being tested.
The close is what measures a broken structure. Say which timeframe's close you are using.
If the close comes just below the low and price turns back up in the next candles, the move may be a false breakout. The next candles matter too.

What it shows, what it does not prove

What it shows

At which point a rising or falling structure stops holding
A measurable difference between weakened, broken and confirmed
A way to read trend change from the sequence of highs and lows rather than a single candle

What it does not prove

That price will move the other way after a break
How long the new trend will last or how far it will go
That a change on one timeframe holds on other timeframes

The MarketLevelMap view

How it relates to zones

The last important low often forms inside a support zone. That is why it is sounder to measure a broken structure by a close below the zone's lower edge rather than at a single price. A close inside the zone only shows that the zone is being tested.

The lost zone can then act as a resistance zone. Price coming up to it from below and staying under it often shows where the new lower high forms.

Often confused with

For general information only. Not investment advice.Last updated: 23 October 2026