Price Action, Trend and
Market Structure
Learn the foundational technical analysis concepts of price action, trend, and market structure, and how they relate to each other.
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This lesson introduces three interconnected foundational concepts in technical analysis: price action, trend, and market structure. Each is explored in more depth in dedicated lessons later in this module.
This is general educational content introducing foundational vocabulary used throughout the rest of this module.
What Is Price Action?
Price action refers to the raw movement of an instrument's price over time, as displayed on a chart. It's considered the most fundamental building block of technical analysis, since virtually every other technical concept — trend, support and resistance, chart patterns, and indicators — is ultimately derived from studying price action.
What Is Trend?
Trend, introduced earlier in the Market Guides module, describes the general direction price action has taken over a period — upward, downward, or sideways. Trend is essentially a higher-level pattern that emerges from observing price action over time, rather than a separate, independent concept.
What Is Market Structure?
Market structure refers to the broader framework of highs, lows, and price behaviour that forms as price action develops — for example, patterns of higher highs and higher lows during an uptrend, or lower highs and lower lows during a downtrend, concepts explored in detail in the Trend Structure Explained lesson later in this module.
How These Three Concepts Connect
Price action is the raw, foundational data. Trend is a general directional summary derived from observing price action over time. Market structure is the more detailed framework of highs and lows that gives that trend its specific shape and characteristics. Together, these three concepts form the foundation upon which the rest of this Technical Analysis module builds.
🔖 Summary
Price action, trend, and market structure are three interconnected foundational concepts in technical analysis: price action is the raw price movement, trend is the general directional summary derived from it, and market structure is the detailed framework of highs and lows that gives a trend its shape. Together, these concepts form the foundation for the rest of this Technical Analysis module.
Frequently Asked Questions
What is price action?
It's the raw movement of an instrument's price over time, as displayed on a chart, and the most fundamental building block of technical analysis.
How does trend relate to price action?
Trend is a general directional summary that emerges from observing price action over time, rather than a separate, independent concept.
What is market structure?
It's the broader framework of highs and lows that forms as price action develops, giving a trend its specific shape and characteristics.
Why are these three concepts introduced together?
They're closely interconnected — price action is the raw data, trend is the general summary, and market structure is the more detailed framework — together forming the foundation for the rest of this module.
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