Trend Analysis
Higher highs and higher lows — the market's most persistent statistical edge, and the context every other signal lives in.
Price StructureIntermediate 5 min read· Lesson 2 of 13 in Technical Analysis
Explanation
An uptrend is a sequence of higher swing highs AND higher swing lows; a downtrend the mirror. Everything else is a range. 'Trend is your friend' survives because trends statistically persist more often than they reverse (see the Hurst lesson in the quant material).
Interpretation
Define the trend on your trading timeframe, then take signals in its direction: buy pullbacks in uptrends rather than shorting 'because it's gone up a lot.' Extended does not mean finished. A trend CHANGE requires structure to break — a lower high then lower low.
Common mistakes
Counter-trend 'top picking' is the most reliably expensive habit in trading. Second mistake: rechecking the trend on a different timeframe until it agrees with the position you want.