Price never moves in a straight line. Even in a strong trend, it steps forward, pulls back and steps forward again.
Those turning points, called swing highs and swing lows, are the building blocks of every chart. Reading them is the first skill in technical analysis.
An uptrend is a series of higher highs and higher lows. Each rally goes further than the last, and each pullback stops above the previous low. While that pattern holds, buyers are in control.
A downtrend is the mirror image: lower highs and lower lows. Each rally fails below the previous high, and each drop reaches a new low. Sellers are in control until that pattern breaks.
When price rallies but can't exceed the previous high, the uptrend is losing momentum. It is a warning sign, not yet a reversal. Many traders jump to conclusions here and sell too early.
Healthy trends pause. A pullback is a temporary move against the trend, and it is often where trend traders look to enter.
As long as the pullback holds above the last higher low, the uptrend is intact.
Before any trade, mark the last two swing highs and swing lows on your chart. They answer the most important question: which way is the trend running?
Small wiggles are noise. Swing highs and lows on your chosen timeframe are structure. Choose the timeframe first, then trade only the structure you can see on it.
