# Market Structure in Trading: Trend and BOS · DT Academy > Read market structure: swing highs and lows, trend, a break of structure that confirms it, and the shift that warns it may have turned. [Back to The DT Intensive](https://www.thedtterminal.com/academy/courses/dt-intensive) Day 10Market structure Chapters done # Market structure Day 10 of 26 · 8 min read · By DT Terminal Price moves in swings. Trend is how each swing compares with the one before, a break of structure confirms the trend, and a market structure shift is the first sign it has turned. Unlock the full lesson in the app Worked examples, the quiz and the interactive tools are in the app. Free account. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fmarket-structure) Chapter 1 of 7 ## Swing highs and lows Price moves in swings. A **swing high** is a peak with lower prices on both sides. A **swing low** is a dip with higher prices on both sides. **Trend** is how the swings compare with the ones before. Each swing gets a two-letter label: higher or lower than the last swing of its kind, then high or low. | Label | Means | Seen in | | --- | --- | --- | | `HH` | Higher high: the peak is above the last peak | Uptrend | | `HL` | Higher low: the dip stayed above the last dip | Uptrend | | `LH` | Lower high: the peak failed below the last peak | Downtrend | | `LL` | Lower low: the dip went below the last dip | Downtrend | A swing is only a swing **once price has moved away from it**. Until then, the latest high or low can still be extended. Chapter 2 of 7 ## Three kinds of trend An **uptrend** makes higher highs and higher lows. A **downtrend** makes lower highs and lower lows. A **range** makes neither: its highs stall near **resistance** and its lows hold near **support**. Uptrend Downtrend Range Support and resistance are **zones, not single prices**: areas where buyers or sellers have shown up before. **Go deeper** A downtrend is the uptrend picture upside down. In the range above, the three highs stop a few points apart inside the same band, and so do the lows. Chapter 3 of 7 ## Break of structure and the shift In a healthy trend, each new high breaks the one before. That is a **break of structure (BOS)**: a break with the trend. In a downtrend, each new low is the BOS. A **market structure shift (MSS)** is a break *against* the trend. In an uptrend the key level is the last higher low, the low that launched the latest high. A candle closing below it is often the first sign of a reversal. Bearish MSS uptrend turns down [Replay in the app](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fmarket-structure%3Fsection%3Dbos-and-mss%23bos-and-mss) Flipped, in a downtrend the key level is the last lower high. A close above it is often the first sign that sellers have lost control. Bullish MSS mirrored [Replay in the app](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fmarket-structure%3Fsection%3Dbos-and-mss%23bos-and-mss) DT Terminal Charts EURUSD · H1 BOS, then MSS Sample candles, not a record of a real day. The gold line is the high the BOS broke; the red line is the last higher low the MSS closed below. **Change of character, and reading the chart** When a candle closes below the last higher low, buyers have failed to defend it, and the chart is no longer making higher lows. Many traders call the same break a **change of character (CHoCH)**; some keep MSS for a CHoCH that comes with a strong, fast move, so check which meaning a source uses. The chart is an illustrative `EURUSD` H1 sample. On the way up, a candle closes above the high at 1.09082, a BOS that confirms the uptrend. The pullback after it holds at 1.08663, the last higher low, and price makes one more high at 1.09344. Then a candle body closes below the last higher low, at the marker labelled MSS, and the lower high and lower low that follow confirm the turn. Chapter 4 of 7 ## The rules The whole idea in one table. Read the bearish column for an uptrend that may be ending, the bullish one for a downtrend. | Rule | Bearish MSS | Bullish MSS | | --- | --- | --- | | Before | Uptrend: HH and HL, each high breaks the last (BOS) | Downtrend: LL and LH, each low breaks the last (BOS) | | Key level | The last higher low | The last lower high | | The shift | A candle body closes below the last HL | A candle body closes above the last LH | | Not a shift | A wick below that closes back above | A wick above that closes back below | | What follows | A lower high, then a lower low | A higher low, then a higher high | Market structure ### With the trend, against it, and a wick that is neither - Break of structure - Bearish shift - Bullish shift Uptrend key level: the last higher low Downtrend key level: the last lower high Break of structure a close beyond the last high, with the trend Market structure shift a body closes through the key level Wick only it closes back: not a shift **The gold HL or LH is the key level.** A body that closes through it is the shift. A wick through it that closes back is a rejection, and the trend carries on. Schematic candles, not market data. The downtrend column is the uptrend turned upside down. Shift to trend the order it happens in **The shift is step two of four.** Many traders wait for the first lower high and lower low before they treat the old trend as over. **Count the close, not the wick.** A wick through the level that closes back is a rejection, often a sign the trend is still working. **One shift is a warning, not a guarantee.** The new trend is confirmed by its **first lower high and lower low**. **Always name the timeframe.** Write the shift down as a strategy In Strategies, write the rule: the timeframe, the key level and what counts as the shift (a body close, not a wick). **Go deeper** Most traders who read structure this way count the close. A wick shows where price went during the candle; the body shows where it was accepted when the candle finished. A wick that closes back is a rejection of those prices. An MSS tells you the old trend is broken. The new trend is only confirmed when price makes its first lower high and lower low (or higher low and higher high). An MSS on M5 can be a normal pullback on H4. Strategies is in the Trading Lab. Name the key level as the last higher low or lower high, and link the trades you take on it to that strategy, so you can see how the setup performs on its own. Chapter 5 of 7 ## A wick that looked like a shift Three cases with illustrative prices, not a record of a real day. First, a shift that was not one. Worked example ### Example 01: A failed MSS: the wick goes through, the close comes back The worked example, with every number walked through, is in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fmarket-structure%3Fsection%3Dexamples%23examples) Free account Chapter 6 of 7 ## One candle, two timeframes Second, a shift that depends on the chart you are looking at. Worked example ### Example 02: An MSS on M5 that is only a pullback on H4 The worked example, with every number walked through, is in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fmarket-structure%3Fsection%3Dtwo-timeframes%23two-timeframes) Free account **What happened next** On `H4` the last higher low is 1.33800 and the last higher high 1.34900. Price kept falling to 1.34150, a 75 pip pullback that held 35 pips above the H4 higher low, then rallied to 1.35240, a break of structure 34 pips above the old H4 high. Chapter 7 of 7 ## A clean shift, swing by swing Third, a clean shift from start to finish. Worked example ### Example 03: A clean bearish MSS on XAUUSD The worked example, with every number walked through, is in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fmarket-structure%3Fsection%3Dclean-shift%23clean-shift) Free account Practise it in the backtester Replay a week of `XAUUSD` on H1 and mark every HH, HL, LH and LL. **Practise where a mistake costs nothing** Reading structure is a skill you build by repetition. Keep marking swings until you can name the last higher low before the shift prints. In the backtester the playhead hides what comes next, and the horizontal line tool marks the last higher low before the shift prints. Then compare the trades you took right after a shift with the rest. When you log a trade, give it the **same setup tag every time**, such as `MSS` or `Pullback`: the Trade Log filters by tag, so you can pull up every shift trade you have taken and see how they went. Quick review ## Check yourself Quick review · 0 of 0 Quiz ### Check yourself: 1 question Answer each question and see why it is right, in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fmarket-structure%3Fsection%3Dcheck%23check) Free account [All lessons in The DT Intensive](https://www.thedtterminal.com/academy/courses/dt-intensive) [Previous](https://www.thedtterminal.com/academy/the-math-behind-trading) ## The math behind trading Day 09 · 10 min read [Next in Learn to trade](https://www.thedtterminal.com/academy/supply-and-demand) ## Identifying supply and demand Day 11 · 10 min read ## Try it on your own account Connect a broker and DT Terminal verifies every trade against it. Free to start. 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