Chart School / Reading Charts
Trend structure
Lesson 4 of 14 · about 1 min read, plus practice · Glossary
Chart readers describe an uptrend with successive higher swing highs and higher swing lows, and a downtrend with lower highs and lows. A swing is a locally important turning point, not every small move. Which swings matter depends on interval and judgment. A sideways series may support neither description. Record your chosen horizon before labeling a trend. These labels describe observed history; they do not prove what will happen next or explain the economic value of an investment.
Worked fictional example
Fictional River records lows at $40, $43 and $46, with highs at $48 and $52. This supports an upward structure over that chosen span, even if several individual candles decline.
On a small screen, scroll the chart horizontally to read every label.
Observation order / daily periods →
Accessible data table and chart description
Separate fictional daily OHLCV illustration for Trend structure. Hollow body: close at or above open; filled body: close below open. Table provides exact values.
| Date UTC | Open | High | Low | Close | Volume |
|---|---|---|---|---|---|
| 2024-01-01 | 40 | 41 | 39 | 40 | 100 |
| 2024-01-02 | 40 | 49 | 39 | 48 | 120 |
| 2024-01-03 | 48 | 49 | 42 | 43 | 0 |
| 2024-01-04 | 43 | 53 | 42 | 52 | 160 |
| 2024-01-05 | 52 | 53 | 45 | 46 | 180 |
| 2024-01-06 | 46 | 56 | 45 | 55 | 200 |
Legend: hollow body = close ≥ open; filled blue body = close < open. Wick = low to high. Direction is also readable from the table, without color.
What could invalidate this interpretation?
A later lower low weakens that specific higher-low description; it does not establish the size or duration of a new decline.
A counterexample
A brief upward bounce in a larger sequence of lower highs does not by itself establish a lasting uptrend.
Check your understanding
Further learning
Original FinanceFD explanations and drawings. For additional context, see Fidelity’s overview of technical analysis, Fidelity’s RSI guide and Investor.gov’s investing introduction.
Learning progress
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