SesTrading · Answers

Market structure: higher highs, lower lows and where to enter

By Saad El Soussi, UAE-authorized finfluencer · Updated 2026-11-08

Market structure is the sequence of swing highs and swing lows on a chart. A bullish structure makes higher highs and higher lows, buyers are in control and the expectation is that the price continues up; a bearish structure makes lower lows and lower highs. A sideways market makes similar highs and similar lows until it breaks out. The lesson's practical rule: in a bullish structure you do not chase the expansion, you wait for the retracement (the pullback) and buy there, with the stop under the last higher low; in a bearish structure you sell the retracement to a lower high. On gold's 4-hour chart from August to November 2026, a bearish period, the bounces against the trend retraced a median 72% of the previous leg, which is why waiting for the pullback matters.

The three structures

Price moves in swings: a leg up, a pullback, another leg up. Mark the turning points and you get a chain of highs and lows. The relationship between consecutive highs and consecutive lows is the structure:

Structure	Highs	Lows	Who dominates	What you look for
Bullish (uptrend)	Each higher than the last	Each higher than the last	Buyers	A retracement to buy, stop under the last higher low
Bearish (downtrend)	Each lower than the last	Each lower than the last	Sellers	A retracement to sell, stop above the last lower high
Consolidation (range)	About the same	About the same	Balanced	Nothing, until a breakout; the Asian session is the daily example

The lesson draws the ideal zigzag (low, high, higher low, higher high, higher low, higher high) and then says the important thing: "in real life you will never see the market structure being like this. It's not that clear at all". Real charts have overlapping swings, failed breaks and long ranges inside trends. The skill is to decide which swings count, which comes down to the timeframe you read them on.

How to mark swings so the structure is readable

A swing high is a candle whose high is higher than the highs of the candles on both sides of it; a swing low is the mirror image. How many candles on each side is your choice: one on each side gives a very noisy chain, five or six on each side gives the swings a human would draw. For the measurements below we used six 4-hour candles on each side, that is, a high that was the highest point of a 52-hour window. Then read the chain in order:

Find the last swing high and the one before it. Higher = bullish so far; lower = bearish so far.
Do the same with the last two swing lows. Bullish structure needs both higher highs and higher lows; one without the other is a warning, not a trend.
Mark the most recent swing low in an uptrend (or swing high in a downtrend). That is the level the structure "breaks" at: a close below the last higher low is the first sign the uptrend may be over. The lesson says reversals typically come at daily, weekly or monthly levels, which a later lesson covers.
Read it on two timeframes: the 4-hour or daily chart for the structure, the 15-minute or 1-hour chart for the entry inside the retracement. Trading timeframes explains the pairing.

Enter on the retracement, not the expansion

This is the lesson's central instruction: "you don't want to catch the expansion move, but you want to catch the retracement move until you can get an optimal trade entry and ride the wave for the continuation". Three reasons it is right:

The stop is smaller. Buying in the middle of an expansion leaves the last higher low far below; buying the pullback puts it close. Same risk in dollars, bigger position, bigger reward for the same move. With $50 of risk (1% of $5,000) a $10 stop in gold allows 50 ÷ (10 × 100) = 0.05 lots; a $25 stop allows 0.02.
The reward is larger. If the next leg is similar to the last one, entering near the start of it gives you most of it; entering near the end of the previous one gives you the pullback first.
Expansions are where the first-hour traps live. The sessions lesson describes the fast move at the open that takes out stops and reverses; chasing it is how beginners buy the high of the day.

The lesson ends by naming what later lessons develop: buy in the lower part of the current leg ("discount"), sell in the upper part ("premium"). A pullback that stops halfway down the previous leg, or at the previous swing, is the picture to wait for.

What we measured: how deep gold's pullbacks were

We built 4-hour candles from the hourly COMEX gold future (GC=F, data via Yahoo Finance) for 3 August to 2 November 2026 (401 candles) and marked swings with six candles on each side. Gold fell over the period, from about $4,120 to $3,966 with a high of $4,741 and a low of $3,889, so the dominant structure was bearish and the counter-trend moves were bounces. There were 26 swings:

Leg	Count	Median size of the leg	Median retracement of the next move	Structure held (retracement under 100%)
Down leg, then bounce (with the trend)	12	$154	72%	9 of 12 (75%)
Up leg, then pullback (against the trend)	12	$126	112%	5 of 12 (42%)

Read it this way. With the trend, three bounces in four stopped below the previous lower high, and the median bounce gave back 72% of the leg before the next lower low: a seller who waited for the retracement got an entry around two-thirds of the way back up, with the stop above the lower high close by. Against the trend, the "higher lows" failed more often than they held (7 of 12 pullbacks went below the previous low): buying higher lows inside a bearish daily structure is the mistake the lesson's two-timeframe rule prevents. The sample is one quarter of one market; the proportions will differ in a trending-up year, but the lesson's instruction (trade with the higher-timeframe structure, enter on the retracement) is what the numbers reward.

One more measured number, from the daily chart over the 251 trading days to 2 November 2026: gold closed higher than the day before on 51% of days, and after an up day the next day was up only 46% of the time. Day-to-day direction is a coin toss; structure lives in the swings, not in yesterday's candle. That is why "decoding price charts" means reading highs and lows, not colours.

A worked example

Daily gold chart: higher highs and higher lows for three weeks, last swing low at $3,940, last swing high at $4,010. The 1-hour chart pulls back to $3,965 over two days and makes a small higher low there. Entry $3,967, stop $3,951 (under the hourly higher low, $16 away), target the previous swing high at $4,010 ($43 away, 2.7R). Account $5,000, risk 1% = $50: 50 ÷ (16 × 100) = 0.031, rounded down to 0.03 lots; loss at the stop 0.03 × 100 × 16 = $48, gain at the target 0.03 × 100 × 43 = $129. If instead the daily chart closes below $3,940, the structure has broken: no long trades until it rebuilds. Check any variation with the profit calculator.

Key points from the lesson

Bullish structure = higher highs and higher lows, buyers dominate, expect continuation; bearish = lower lows and lower highs.
Consolidation = similar highs and lows until a breakout.
In a bullish structure, look for the retracement to buy; in a bearish one, the retracement to sell at a higher level. Do not chase the expansion.
Real charts are never as clean as the diagram; read the structure on a higher timeframe (the lesson's examples are 4-hour charts).
A reversal typically comes at a daily, weekly or monthly level; until then, trade with the structure.
Buy in discount, sell in premium: the lower and upper parts of the current leg (developed later in the course).

Previous summary: forex trading sessions and kill zones. Related: trading timeframes, candlestick patterns (what a single candle can and cannot tell you) and the gold trading strategy, whose first setup is the trend pullback described here. Module 2 adds the tools for the pullback: support and resistance (where the swing levels are) and Fibonacci retracement (how deep into the leg to wait).

Want to see structure read on live charts?

The Telegram bot answers in English, explains the VIP gold trades (entry, stop loss, targets) and shows where the weekly results are published, losing trades included. Trading is risky; most retail accounts lose money.

Open the SesTrading botOn Telegram

Questions people ask

What is market structure in trading?

The order of swing highs and swing lows on a chart. Higher highs with higher lows is bullish structure, lower lows with lower highs is bearish, similar highs and lows is a range. It is the first thing to read on a chart because it tells you which direction to look for trades in and where the structure would break.

What is a break of structure?

In an uptrend, a close below the most recent higher low; in a downtrend, a close above the most recent lower high. It does not prove a reversal, but it ends the reason for trading in the old direction until a new sequence forms.

Why not buy the breakout to a new high?

Because the stop is far away (the last higher low) and the pullback that usually follows a new high comes before the continuation. In our gold sample the move after a leg retraced a median 72% of it with the trend. Buying the retracement gives a smaller stop and a larger share of the next leg.

Which timeframe should I read structure on?

The lesson's examples are 4-hour charts. A common pairing is the daily or 4-hour chart for the structure and the 15-minute or 1-hour chart for the entry within the pullback. Reading structure on a 1-minute chart alone gives dozens of "trends" a day, most of them noise.

Is this the full lesson?

No. It is a written summary with the key points and our own measurements added. The course has 87 video lessons in three modules; the bot can tell you about it.

Authorized in the UAESaad Nizar El Soussi, founder of SesTrading, is listed by the UAE Capital Market Authority as an authorized finfluencer (entry 193, added 24 September 2026). Check the official list.