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Mapping Swing Structurethe definitions everything else in this book depends on

Evidence: ModerateBeginnerMarket structure · Foundation

Before any structure strategy can be traded it has to be possible to say, mechanically, where the swing points are. Almost nobody does this, which is why two traders looking at one chart disagree about whether structure has broken.

This page is the definition rather than a setup: a fractal rule for swing points, a rule for what makes a trend, and a rule for when it has ended. Everything else in this book assumes it.

The vocabulary on this page comes from trading education, not from research. Where it renames something with real support, the page says so. A name is not a finding.

Category
Market structure · Foundation
Timeframe
Any — apply the same definition on every one
Suitable pairs
Any
Session
Bar close only
Indicators / tools
A fractal swing definition (N bars either side) · nothing else

Valid setup

MS-06 · MAPPING SWING STRUCTURE — THE DEFINITION each marked point is higher than the two bars either side of it — and none of them was confirmed until two bars later REFERENCE 1.0741 1.0772 1.0803 1.0834 1.0865 1.0896 1.0927 swing high 1 swing high 2 — higher swing high 3 — higher again swing low 1 swing low 2 — higher swing low 3 — higher. Both series rising: uptrend 1 2 3 4 5 6 1.0883 1.0842 ① A bar higher than the two either side — a swing high ② And its mirror for the low ③ Both sequences rising is what 'uptrend' means here ④ Each point was confirmed two bars AFTER it formed ⑤ A close above point ⑤ is a break of structure ⑥ A close below point ⑥ is a change of character

Exact rules

Entry

  • Swing high: a bar whose high is higher than the highs of the N bars either side of it. Swing low is the mirror. N = 2 or 3 is usual; write yours down.
  • A swing point is only confirmed N bars after it forms. That lag is unavoidable and every structure strategy carries it — a chart drawn afterwards hides it completely.
  • Uptrend: the last confirmed swing high is higher than the previous one and the last confirmed swing low is higher than the previous one. Both.
  • Break of structure: a close beyond the last confirmed swing point in the trend's direction. Change of character: a close beyond the last confirmed swing point against it.

Stop loss

  • For any trade built on this: below the last confirmed swing low for a long, with an ATR buffer.
  • If the structure has to be redrawn to justify a position, the position is wrong. That rule is worth more than most indicators.
  • Risk as the strategy using the structure specifies.

Take profit / exit

  • The next opposing swing point is the natural first destination, because that is where the orders from the last turn are resting.
  • Structure gives location, not timing. A level can be reached in an hour or in a week and nothing here says which.
  • Test your definition by applying it to a chart you have never seen with the right-hand side covered. If your conclusions change when you uncover it, the definition is not mechanical yet.

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More from Market structure

Break of Structure ContinuationBOS, then a higher lowChange of Character ReversalCHoCH, then a lower highLiquidity Sweep → Market Structure Shiftthe full sequence

Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.