Market structure is the foundation of all technical analysis. Before you look at any indicator, before you draw a trend line, before you consider an entry, you need to understand what the market is actually doing at a structural level. Everything else builds on top of this.
Support is a price level where buying has previously emerged and stopped a decline. Resistance is a level where selling has previously emerged and stopped a rally. These levels form the backbone of all price action trading and are the most reliable reference points on any chart.
| Signal | What It Means |
|---|---|
| Lower low in an uptrend | First warning sign — uptrend may be weakening |
| Lower high after a lower low | Structural shift confirmed to downtrend |
| Higher high in a downtrend | First warning sign — downtrend may be ending |
| Price breaking key resistance | Potential trend continuation or breakout |
Market structure underpins trend following, top-down analysis, and spotting technical warning signs before a reversal occurs.
No. Market structure is read purely from price action — the raw movement of highs and lows on a chart. Adding too many indicators can actually obscure the structural picture. A clean chart is often the most powerful analytical tool.
Always start with the higher timeframes. The weekly and daily charts give you the macro structural context. Then drill down to lower timeframes to time your entries within that structure.
Strong levels have been tested multiple times, had a significant reaction when first created, and are visible on higher timeframes. The more confluences a level has, the more significant it tends to be.
Learn how to combine timeframes for better entries at KM Investment Services.
Next: Top Down Analysis