Market structure

Trends, swing points, support and resistance, ranges, breakouts and false breakouts, gaps and volume: the skeleton of every chart.

1. Zoom in, zoom out: timeframesA candle can be one minute or one week long, so always check which zoom you are looking at.
2. Up, down or sideways: what a trend isHigher highs and higher lows mean up, lower highs and lower lows mean down, and neither means sideways.
3. Swing highs and swing lowsA swing high is a peak with lower candles on both sides, and a swing low is a valley with higher candles on both sides.
4. Support: the floorSupport is a price where buyers showed up before, so a fall often slows or stops there.
5. Resistance: the ceilingResistance is a price where sellers showed up before, so a rise often slows or stops there.
6. Drawing a trendlineConnect the lows in an uptrend or the highs in a downtrend, and a third touch makes the line more trustworthy.
7. Levels are zones, not linesPrice rarely turns at the exact same cent, so think of levels as thick bands, not thin lines.
8. Sideways markets: trading rangesIn a range, price bounces between a floor and a ceiling until one of them finally breaks.
9. When the floor becomes the ceilingOnce a floor breaks it often turns into a ceiling, and a broken ceiling often turns into a floor.
10. Volume: how many joined the fightVolume shows how much was traded, so a move on big volume has more people behind it.
11. BreakoutsA breakout is when price closes outside the box it was stuck in, and a strong close on big volume makes it more believable.
12. Gaps up and gaps downA gap is empty space on the chart where no trading happened, often because news arrived while the market was closed.
13. False breakoutsSometimes price jumps out of the box and falls right back in, and that trap can cause a fast move the other way.
14. The breakout retestAfter breaking out, price often comes back to test the old level, and holding there is a good sign.
15. Gap types: which gaps fill and which runWhere a gap happens tells you whether it is the start, the middle or the end of a move.
16. Does volume agree?A price move that lots of traders join is harder to stop than one that nobody joins.
17. When a trend endsWhen an uptrend fails to make a new high and then breaks its last low, the stairs are no longer going up.