A price pattern in an uptrend where each successive high and low is higher than the previous one.
Deep Dive
Higher highs and higher lows (HH/HL) is the defining characteristic of an uptrend. Each time price peaks, it reaches a higher level than the previous peak (higher high). Each time price pulls back, it finds support at a higher level than the previous pullback (higher low). This pattern shows buyers are in control and willing to pay increasingly higher prices.
This concept is fundamental to understanding market structure and trend analysis. As long as price continues making HH/HL, the uptrend is intact and traders should favor long positions. The trend is only threatened when this pattern breaks - when price fails to make a new higher high, or worse, makes a lower low.
Identifying HH/HL patterns helps traders stay on the right side of the market. During an uptrend, the strategy is to buy pullbacks (at the higher lows) rather than chase highs. Each higher low represents an opportunity to enter with defined risk.
Why It Matters
This pattern confirms an uptrend and helps traders stay with winning positions.
Related Terms
- Bullish — A market sentiment where traders expect prices to rise. Characterized by higher highs and higher lows.
- Market Structure — Market Structure is a trading concept. Market structure is the backbone of price action trading. It tells you the current direction of the market, where it migh
- Swing High — A local price peak formed when price makes a higher high followed by a lower high on both sides.
- Swing Low — A local price trough formed when price makes a lower low followed by a higher low on both sides.
- Trend — The general direction in which the price of an asset is moving. Trends can be upward (bullish), downward (bearish), or sideways (ranging).