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Lesson 51 of 100•Chapter 06
Smart Money Concepts• 6 mins Read•Level: Advanced

1. Swing Highs & Swing Lows: Defining True Structural Points

Part of Chapter 06: Market Structure & Smart Money Price Action

Core Learning Concepts
  • 3-candle fractal definition of a valid Swing High and Swing Low
  • Higher Highs (HH) and Higher Lows (HL) in bullish market structure
  • Filtering out internal minor noise from external swing structure

Before applying advanced price action concepts, you must objectively define what constitutes a structural high and low. Without objective rules, traders draw arbitrary lines and get trapped.

A valid Swing High is a 3-candle fractal formation where the center candle has the highest high, flanked by a candle with a lower high to its left and a candle with a lower high to its right. A valid Swing Low has the lowest low flanked by higher lows on both sides.

A bullish market structure is defined strictly by a sequence of Higher Highs (HH) and Higher Lows (HL). As long as each pullback forms a Higher Low above the previous swing low, the uptrend remains structurally intact.

Institutional Execution Insight

Distinguish between Major External Structure (which defines the overall trend) and Minor Internal Structure (which forms the sub-waves inside a single leg). Always trade in the direction of the External Structure.

Interactive Learning Lab

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