Every structural idea on this site starts here. If you cannot mark a high and a low cleanly, you cannot mark a trend, a sweep, or a break. This is the grammar. Everything else is sentences.
The three-candle definition
A high is a candle whose wick (or close, if you are being strict) is higher than the candle to its left and the candle to its right. A low is the inverse: the middle candle is lower than both neighbors. You are looking for a pivot, not the tallest candle on the screen.
Why three candles? Because a single spike is just a spike. The neighbors confirm that price tried to go further and failed, or that a new extreme was accepted. This is how you stop drawing arrows on every wiggle.
Swing highs and swing lows
Not every three-candle pivot matters. The ones that change the story are swing points, the highs and lows that other traders can see without you pointing them out. Those are the levels that collect liquidity. Those are the levels a break of structure has to beat.
Example. On a 15-minute chart, you will see dozens of tiny pivots. Zoom out. The swing high that started the last sell-off is the one that matters. Mark that. Ignore the noise in between until you are specifically studying entries on a lower timeframe.
If two people cannot independently circle the same high, it is not a high you should be trading off. Obvious is a feature, not a bug.
Higher highs, lower lows
Once pivots are marked, the sequence is the lesson. Higher high + higher low = upside structure. Lower high + lower low = downside structure. A lower high in a rising market is the first warning. A break of the last higher low is the structure change. Read market structure next, then break of structure.
Drill: twenty pivots
Print or screenshot one 15-minute session. Mark every three-candle high and low. Then cross out the ones that did not change anyone’s mind, the tiny noise. Circle the two that actually turned the auction. Those two are your swing points. Do this for five sessions. Your markings will get quieter. Quiet markings are the point.
If you cannot agree with yourself the next morning which high you marked, it was not a high. Obvious is the filter. See market structure for what the sequence of those points means.
The marking drill
This is the single most useful exercise on the whole hub, because every other structural idea depends on it.
- Screenshot one full session on a 15 minute chart.
- Mark every three candle high and every three candle low you can find.
- Cross out the ones that did not change anybody's mind. Tiny pivots inside a two candle wiggle are noise.
- Circle the two that actually turned the auction. Those are your swing points.
- Repeat for five sessions and compare. Your markings should get quieter, not busier.
If you cannot agree with yourself the next morning about which high you marked, it was not a high. Obvious is the filter, and it is a feature rather than a limitation.
Minor pivot or swing point
| Test | Minor pivot | Swing point |
|---|---|---|
| Visibility | You have to hunt for it | Visible at a glance |
| Reaction | A candle or two of hesitation | A real leg in the other direction |
| Timeframe survival | Disappears when you zoom out | Still visible one timeframe up |
| Use | Timing detail at best | Defines structure and invalidation |
Why equal highs and equal lows deserve their own mark
When two highs form at almost the same price, the chart is advertising a pool of stop orders just above them. The same is true for two matching lows. These are the places price is most likely to visit before a real move, which is why they are the raw material for the sweeps lesson. Mark them differently from ordinary swing points so you remember what they are.
Frequently asked questions
Do I use the wick or the close to mark a high?
Use the wick for the level and watch the close for confirmation. The wick shows how far price reached. The close shows whether it was accepted.
Should I mark highs on every timeframe?
No. Mark them on your bias timeframe and your working timeframe. Two charts, not five.
What if a high forms and then price immediately exceeds it?
Then you watch whether the candle closes beyond and holds. That is the difference between a sweep and a break of structure, and it is the whole reason this drill matters.
Key takeaways
- A high or low is a three candle pivot, not the tallest candle on screen.
- Obvious is the filter. Quiet charts beat busy charts.
- Equal highs and equal lows advertise where the stops are.
- Everything else in technical analysis is built on this one skill.
Technical analysis terms used in this category
| Term | Plain definition |
|---|---|
| Swing high | A candle with a higher high than the candle either side of it, obvious enough that a stranger would mark the same one. |
| Swing low | The same idea inverted. A candle with a lower low than both neighbours. |
| Structure | The sequence those highs and lows form. Higher and higher is an uptrend, lower and lower is a downtrend, mixed is a range. |
| Liquidity | Resting orders, mostly stops and breakout entries, clustered at obvious prices. |
| Sweep | Price wicks beyond an obvious level, takes the orders there, and closes back inside. |
| Break of structure | A body closing beyond an obvious swing point and holding. Control has changed on that timeframe. |
| Displacement | A fast, one sided move that leaves an obvious mark on the chart. |
| Fair value gap | Unfilled space left behind by displacement, where the wicks either side do not overlap. |
| Acceptance | Repeated closes beyond a level, which is the opposite message from a sweep. |
| Confluence | Independent pieces of evidence pointing the same way. Not a smaller chart arguing with a bigger one. |
The order these concepts belong in
Technical analysis becomes confusing when the concepts are learned as a list instead of a chain. Each one depends on the one before it, and skipping a link is why traders can define every term and still not read a session.
- Highs and lows. Nothing else works until you can mark these the same way twice.
- Structure. Highs and lows in sequence give you trend or range.
- Levels. Support, resistance, prior day extremes, overnight boundaries.
- Liquidity. Why those particular levels attract price at all.
- Sweeps and breaks. The two things that can happen when price arrives.
- Gaps and displacement. The trace left by speed, used as a reference not a trigger.
- Timeframes and sessions. The clock that decides how much any of it means.
Read them in that order and each lesson explains the next. Read them at random and you get vocabulary without a method. If you want the whole chain in sequence, start at technical analysis and work down.
How Red Box teaches this
Red Box Technical Analysis is an educational platform focused on technical analysis for scalping and day trading. We teach you how to read the market, prepare your charts and execute with a structured process. That process is taught in a fixed order, with a Discord community and tests that check you actually understood each stage before you move on.
That order matters because most trading education sells the last step first. Entries are entertaining, so entries get taught, and the trader ends up with a folder of setups and no way to tell a good session from a bad one. The Academy runs the other way around. Stage 1 covers the market and the vocabulary. Stage 2 covers the concepts you have been reading about in this hub. Stage 3 turns them into chart preparation you repeat before every session. Stage 4 is execution and risk, and it comes last on purpose.
Where this lesson sits. Everything in the Learn hub is free, and it is the vocabulary layer. The paid Academy is where the process gets assembled, tested and applied to live sessions with structured feedback in the Discord.
What to do next
- Read the lesson again with a chart open. Reading without a chart is entertainment.
- Mark the concept on one instrument, on five past sessions, using the replay function.
- Write one sentence per session describing what you saw. No predictions.
- Bring the questions that survive into the Discord, where the free area includes the no trading calendar and general chat.
Risk and what this is not
This is educational content, not financial advice, and nothing here is a signal or a recommendation to buy or sell anything. Trading involves substantial risk of loss and is not suitable for everybody. Past results, whether ours or anybody else's, do not guarantee future outcomes. Red Box does not manage money, does not take deposits and does not sell or endorse any broker or prop firm. Only ever trade capital you can afford to lose, and if you are unsure, speak to a licensed professional in your jurisdiction.
