Candlestick Mastery · Module 08 of 15
Candles + Market Structure
Price patterns without market structure can mislead. Structure is the sentence a candle sits inside.
The trend is the context for every candle
A pattern means nothing until you know the structure it sits in. The same hammer is a strong signal in one place and a trap in another — and structure is how you tell which.
Market structure is read through four reference points:
- Higher High (HH) — price makes a new peak above the last. Confirms an uptrend continuing.
- Higher Low (HL) — each pullback stops above the previous low. Buyers remain in control.
- Lower High (LH) — a rally fails to reach the prior peak. Sellers are gaining; the trend may be weakening.
- Lower Low (LL) — price breaks below prior support. Confirms a downtrend.
An uptrend is a staircase of higher highs and higher lows; a downtrend, lower highs and lower lows. The moment that sequence breaks — an uptrend failing to make a new high, then making a lower low — the structure is warning you before any single candle does.
In short
HH/HL is an uptrend, LH/LL a downtrend. A pattern's worth depends entirely on the structure it appears in.