Trend Anatomy

The Foundation of All Technical Analysis

Before you can trade effectively, you must be able to identify the trend. This is simpler than most people make it.

The Four Building Blocks

Every market move is composed of just four elements:

• •HH (Higher High): A peak that is higher than the previous peak
• •HL (Higher Low): A trough that is higher than the previous trough
• •LH (Lower High): A peak that is lower than the previous peak
• •LL (Lower Low): A trough that is lower than the previous trough

Bullish Trend (Uptrend)

A bullish trend is defined by a series of Higher Highs and Higher Lows.

• •Each push up makes a new HH → buyers are in control
• •Each pullback makes a HL → buyers are stepping in at higher prices
• •As long as this sequence holds, the trend is bullish

Bearish Trend (Downtrend)

A bearish trend is defined by a series of Lower Highs and Lower Lows.

• •Each push down makes a new LL → sellers are in control
• •Each pullback makes a LH → sellers are stepping in at lower prices
• •As long as this sequence holds, the trend is bearish

How to Mark Structure

1. Start from a clear swing point (a obvious high or low)

2. Label each subsequent high and low

3. Ask: "Is this high higher or lower than the last? Is this low higher or lower than the last?"

4. The pattern of HH/HL or LH/LL tells you the trend

Common Mistakes

• •Overcomplicating it: Don't use 10 indicators. Just label the highs and lows.
• •Zooming in too much: Use a timeframe that shows clear, obvious swings.
• •Ignoring wicks: A wick that sweeps a previous high IS a higher high (context matters).

"If you can't identify the trend in 5 seconds, you're either on the wrong timeframe or there is no clear trend – and that's information too."