You must have heard traders talk about higher highs, higher lows, and lower lows, lower highs.
You would have also seen them drawing it on charts.

Many of the traders don't give much importance to highs and lows and they rarely use it in their trading.

00:00 - Understanding Swing High Low
01:04 - Understanding Trends
01:41 - What are Highs and Lows in Forex
02:44 - How Higher High, Higher Low, Lower High and Lower Low Works
04:08 - How Higher High and Higher Low are Created
04:15 - How Lower High and Lower Low are Created
04:30 - Higher High and Higher Low on Chart
05:50 - How to Spot Trend Reversal with Highs and Lows
06:39 - Higher High, Higher Low, Lower High, and Lower Low Examples Chart
08:05 - Higher high lower low trading strategy



If you have not used highs and lows yet, or don't consider it important?
I insist you watch this video till the end.
This video may show you the importance of highs and lows.

Highs and lows play an important role in understanding trends.
And it also helps us to understand when a trend is about to end and ready to bend.

So, lets us first start by understanding what are highs and lows, how are they formed, and in the end I will tell you how to use it with your technical analysis.

Whether the market moves up or down, it happens because of the buyers and sellers in the market.
What I meant is, when there are more buyers in the market, the price moves up and when there are more sellers in the market the price moves down.

Now, as there are millions of different buyers and sellers in any market, they all will get in and out differently as per their needs.

After the price has done correcting, it will again move up if the party dominating earlier is still in power and the cycle will continue causing the price to trend and create a series of highs and lows.

Lets us try to understand this correctly.
Let us say from this level the buyers jumped in, so as buyers are now more than the sellers the price will move up.

Now as the price is moving up, different buyers and sellers will get in and out at a different level.
Lets us say at this point a bunch of buyers got out or sellers came in.

If now the buyers still have control of the market the price will start to move up
And this time it will move above this level.

So, this was our low from where price moved up, this will the first high.
And when the price retraced it will be our higher low.
As this low is higher than the previous low.

And when this price move above this level, it will create a new high.
As this high is higher than the previous one, it will be our new higher high.
Also, when it again moves down and stays above the previous higher low, we will get a new higher low.

And this is how the price moves most of the time.

If a market is up-trending, the price creates HH and HL.
And if a market is down-trending, the price creates LL and LH.

And therefore if we are able to read the highs and lows of the market correctly, we can easily find out entry points to ride the trend.

Let's take some examples of a live forex chart to understand it correctly.

Here on EURUSD Daily chart,
From this level, the market started an uptrend.
So, let this be our low, now when the price moves up and then corrects and move above it.
This will be our high, this will be our Higher low as this low is higher than the previous one.
Now as the price moved above this high, this will be the new higher high.
And a new higher low.

And you can see, in an up-trending market, the price is creating continuous higher highs and higher lows.

So, the price moves in the same way until it bends, and when it bends, the price again gives us an indication that the trend has changed or is changing.
You just need to observe the price.

Many of you guys must be using trendlines to spot if the price is changing the trend or not.

But I still think, using highs and lows along with patterns and trendlines takes you on a whole different level.


Moving forward, how to spot if the trend is about to bend or a momentum shift has happened.

Let's quickly jump to the previous uptrend examples to understand this.

Let's assume at this point sellers jumped in and the price created a new higher low.

Let us move to the chart and see if this thing really works?

If you look at this pair, the market was trending up and creating continuous higher highs and higher lows.

But at this point, the price could not create any new higher high.

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