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Market Intelligence › Basic Terminologies
Support, resistance, higher high, BOS, supply-demand — the skeleton of the chart
Published by The Retail Trader · AUG 03, 2026 · Market Structure
The same candle pattern works well in one place and fails completely in another — the difference is location. Market structure is the language of that location: which levels are important, what shape the trend is in right now, and in which zones big orders are hiding.
First, the levels you find on every chart:
• Support — The price area where buyers become so active that the fall stops.
• Resistance — The price area where sellers become dominant and the upward move stops.
• Role Reversal / Flip — A broken resistance becomes support going forward, and a broken support becomes resistance. This is called a polarity flip.
• Trendline — A slanted line connecting swing lows (or highs). It acts as dynamic support/resistance.
• Channel — Price moving between two parallel trendlines.
• Round Number / Psychological Level — Numbers like 100, 500, 25,000, where orders naturally pile up.
• Previous Day High / Low — Yesterday's high and low. For intraday traders, these are among the most watched levels.
• All-Time High (ATH) / All-Time Low (ATL) — The highest and lowest price ever reached.
The definition of a trend comes from structure, not from feel. These are its parts:
• Swing High — A peak where the candles on both sides are lower than it.
• Swing Low — A bottom where the candles on both sides are higher than it.
• Higher High (HH) / Higher Low (HL) — Each new peak is higher than the previous one and each dip is higher than the previous one. This is the technical definition of an uptrend.
• Lower High (LH) / Lower Low (LL) — The opposite pattern: each rally smaller, each fall deeper. This is a downtrend.
• Market Structure — The sequence of these swings, which tells you what mood the market is in.
• BOS (Break of Structure) — A new swing point breaking in the direction of the trend, meaning the trend is still alive.
• CHoCH (Change of Character) — Structure breaking in the opposite direction for the first time, which is the first hint of a possible trend change.
• Leg — The move from one swing to the next. A trend is built from these legs.
• Higher Timeframe Bias — The trend of the bigger timeframe, used as a background while trading on a smaller timeframe.
New traders draw lines, experienced traders draw zones — because orders sit not at one exact price but in an area:
• Supply Zone — The area from which sharp selling came earlier; if price returns there, sellers may show up again.
• Demand Zone — The area from which sharp buying came earlier.
• Order Block — The last candle cluster from which a big move started. The idea is that institutional orders may be left over there.
• Fair Value Gap / Imbalance — Price moving so fast that an area in between is left without proper trading. The market often comes back to fill it.
• Liquidity — The place where many orders (especially stop losses) are stacked, such as just above or below an obvious high, low or round number.
• Liquidity Grab / Stop Hunt — Price touching those stops and immediately reversing. This is why an SL placed at an obvious level often gets hit.
• Equal Highs / Equal Lows — Two or more equal levels, behind which there is a higher chance of a cluster of stops.
• Mitigation — Price returning to the same zone from which the move started.
• Consolidation Zone — The box where price stayed for a long time. Breaking out of it is often the trigger for the next move.
The same chart on a different timeframe tells a completely different story:
• Timeframe — How much time one candle covers. A smaller timeframe has more noise, a bigger timeframe has more context.
• Multi-Timeframe Analysis — Looking at the same stock on two or three timeframes: the bigger one for the trend, the smaller one for the entry.
• HTF / LTF — Short form for higher timeframe and lower timeframe.
• Top-Down Analysis — First the index, then the sector, then the stock, then the entry timeframe — coming from the top down.
• Scalping — Small minute-by-minute moves, many trades in a day.
• Intraday Trading — The position is opened and closed on the same day.
• Swing Trading — Holding a position for a few days to a few weeks.
• Positional / Investing — A horizon of months or years, where structure meets fundamentals.
And finally, the three states the market keeps moving between — your strategy has to change according to them:
• Trending Market — Clear HH-HL or LH-LL. Here, going with the trend works.
• Range-Bound Market — Moving back and forth between two levels. Here, buying at support and selling at resistance works, not breakout trades.
• Choppy Market — Neither a trend nor a clear range; small jerks that keep eating stop losses.
• Expansion vs Contraction — Volatility widening and narrowing. A small range is followed by a big range, and the reverse too.
• Opening Range — The high-low of the first 15-30 minutes of the day, which many intraday systems use as a reference.
• Intraday High / Low — Today's highest and lowest price so far.
• Volume Confirmation — Structure may break, but without volume — it often turns into a fakeout.
Big moves do not come suddenly — a long preparation comes before them. This is the classic vocabulary of that preparation:
• Accumulation — A long range in which big players are quietly buying. The chart looks boring, so most people get bored and leave right here.
• Markup — The upward trend after accumulation, where the move starts to become visible to everyone.
• Distribution — A long range at the top, where those same big players are slowly selling.
• Markdown — The fall after distribution.
• Spring — A false breakdown below the range that takes out stops and comes back inside the range.
• Upthrust — The opposite: a false breakout above the range.
• Re-accumulation — A range in the middle of a trend that breaks in continuation, not in reversal.
• Effort vs Result — A lot of volume (effort) and little price move (result). This mismatch often shows that someone on the other side is absorbing.
• Absorption — Price not falling despite continuous selling coming in at one level.
• Climax — Very large volume and a very large candle, often at the end of a move.
Not every line you draw is a level. These are the terms used to judge the quality of a level:
• Touch Count — How many times the level has been tested. Two or three clean touches make a line a level, one touch does not.
• Reaction Strength — How far price went after reversing from the level. The bigger the reaction, the more important the level.
• Freshness — An untested zone is often stronger than a zone that has already been used several times.
• Break and Close vs Wick Break — Closing beyond a level and only a wick poking through are completely different things. Most fakeouts are wick breaks.
• Confluence Zone — Two or three different methods (level, moving average, Fibonacci) meeting at the same price.
• Level Cluster — Several levels bunching up in a small range, which creates a thick barrier.
• Magnet Level — A price that the market keeps getting pulled towards, such as a round number or a heavy-volume level.
• Price Memory — An old area where big action happened earlier; the market often respects it again.
• Invalidation — The point beyond which the level loses its meaning altogether.
• Measured Move — Measuring the pattern's own height forward from the breakout point to get a rough target.
• Round Trip — Price breaking out and then returning all the way back into the range — the clearest shape of a trap.
Structure tells you where to look; price action tells you when. Together they make a trade — the indicator comes after them, not in their place.
This journal is for educational purposes only — it is not a buy or sell recommendation. Look at every term on your own chart, because that is the only way it sticks.