Higher highs, higher lows, lower highs, lower lows

What it means

Each new swing high is either higher or lower than the previous swing high, and each new swing low likewise. That gives four labels, usually written HH, HL, LH and LL.

A sequence of higher highs and higher lows is what most readers mean by an uptrend; lower highs and lower lows, a downtrend. Mixed labels mean the market has not been doing either cleanly.

How we detect it

The engine walks the swings in time order and compares each with the previous swing OF THE SAME KIND — a high against the last high, a low against the last low. The first high and the first low have nothing to compare against, so they receive no label.

The comparison is on price alone. How far apart two swings are in time, and how large the difference between them is, are not part of the label.

That last point is the honest limitation of the whole vocabulary: a higher high by one tick and a higher high by ten percent produce exactly the same letters.

When the read carries information

• The swings themselves are real turns rather than noise, which is a property of the timeframe more than of the labelling.
• There have been enough swings to form a sequence — two labels is a comparison, six is a pattern.
• The market has not repriced structurally in the middle of the window, which would leave labels on both sides of a break describing two different markets.

When it misleads

• A chart that has gone nowhere can still print a clean run of labels leaning one way. This is the single most common way a structure read misleads, and it is exactly why the engine does not stop here.
• One outsized swing sets a bar that every later swing is measured against, so a chart can read as lower highs for weeks because of a single spike.
• Ties resolve downward in this implementation: a swing high exactly equal to the previous one is labelled a lower high, because the comparison is strict.

How it reaches you

These labels appear in our analysis as the structure section, and they are an INGREDIENT rather than a conclusion. The regime read is what decides whether the market is actually trending.

No label here is a statement about what happens next, and none of them is a prompt to do anything.