Higher Highs, Higher Lows, Lower Highs, Lower Lows: How to Read Trend in 60 Seconds

Before I look at an indicator, a news headline, or anybody's opinion, I ask one question: which way are the swings stepping? Four little labels answer it.

Price never moves in a straight line. It moves in waves: up a little, back a little, up again. Every wave leaves a peak (a swing high) and a valley (a swing low). When you compare each new peak and valley to the last one, you get four possible answers.

That's the whole alphabet. Now let's put the letters together.

1. The Uptrend: HH + HL

An uptrend is a staircase going up. Buyers keep pushing to new peaks (higher highs), and when price pulls back, it doesn't fall as far as last time (higher lows). Both conditions together. One without the other is not a trend.

2. The Downtrend: LH + LL

Flip the staircase over. Sellers push price to new valleys (lower lows), and every bounce runs out of gas sooner than the last one (lower highs).

3. The Trend Break: When the Story Changes

This is the most important chart on this page. A trend doesn't end with a headline. It ends with a broken pattern. Watch what happens when an uptrend prints its first lower high, and then a lower low.

The two rules I trade by

1. No calls after a lower high. Once an uptrend prints a lower high, I stop buying calls until a candle closes back above that high.
2. No puts after a higher low. Once a downtrend prints a higher low, I stop buying puts until a candle closes back below that low.

These two rules keep me out of more bad trades than anything else I do. A broken pattern means the other side has shown up. I don't need to know why. I just need to step aside.

4. The Squeeze: LH + HL at the Same Time

What if the highs are getting lower and the lows are getting higher? Nobody's winning. Buyers and sellers are being squeezed into a smaller and smaller box. This is a sideways wedge.

5. Bodies, Not Wicks

Here's where beginners get fooled. A candle's wick (the thin line) shows where price visited. The body (the thick part) shows where price settled when the candle closed. I judge highs and lows by the bodies, after the candle closes.

A long wick above a high usually means buyers tried, failed, and got pushed back. Counting that as a "higher high" would get you into a call at exactly the wrong moment.

6. Real Charts: What It Actually Looks Like

The drawings above are the clean version. Real 1-minute candles are messier. Swings overlap, little bounces fake you out, and the pattern bends before it breaks. So let's look at two real mornings of SPY on the 1-minute chart, Tuesday, October 27 and Wednesday, October 28, 2026, from 9:30 to 11:00.

Tuesday, Oct 27: the whole morning

Zoomed out, the story is simple. SPY dropped from its 9:39 high to its 10:21 low, then turned around and climbed to 11:00. One downtrend, one uptrend. Now let's zoom in and see how messy each half really was.

Zoom 1: the downtrend (9:35 to 10:24)

After the 9:39 high, SPY dropped hard into 9:53. Then it bounced, but the bounce at 9:57 stalled below the high. That's the first lower high. At 10:01 price pushed under the 9:53 low for a lower low. The staircase was stepping down.

Here's the messy part. At 10:11, the dip stopped at 765.79. That's a few cents above the 10:01 low of 765.67. By the rules, that's a higher low, and puts come off the menu. Most people would ignore a few cents. I don't. The rule says wait for a candle to close back below 765.67. That happened at 10:16, when a candle closed at 765.48. Puts were back on, and SPY made its final low at 10:21.

Zoom 2: the trend break and the uptrend (10:12 to 11:00)

Watch the red dashed line. That's the last lower high of the downtrend, at 766.04 (10:14). As long as price stayed under it, sellers were still in charge.

1. 10:21: final lower low at 765.26.
2. 10:25: a candle closed at 766.22, above the last lower high. That's the first higher high. The downtrend is over. No more puts.
3. 10:27: the pullback held at 765.86, well above the 10:21 low. That's a higher low. Now we have both pieces of an uptrend.
4. 10:28 to 10:33: SPY ran from a 766.32 close to a 767.67 close. Higher high.
5. 10:41, the messy part again: the next bounce topped out at 767.50, below the 10:33 high. A lower high inside an uptrend. By the rules, no new calls.
6. 10:46: a candle closed at 767.79, back above 767.67. Calls are back on, and SPY stair-stepped up to 769.14 by 11:00.

Wednesday, Oct 28: the drop, then the chop

Not every morning trends. Wednesday opened with a fast drop: SPY fell from 771.59 to 769.27 in 19 minutes. Then it bounced back up and spent the next hour going nowhere, inside a box from about 770.15 to 771.10.

Inside that box, try labeling the swings. You get a higher high, then a lower high, then a higher low, then a lower low, over and over. When the labels keep flipping, there is no trend. Option premium bleeds while price chops sideways. This is a morning to close the laptop and go about your day.

How big a move are we actually looking for?

Here are the real numbers from these two mornings, measured candle body to candle body.

Notice something. Nobody catches the whole $3.88. You find out the trend changed at 10:25, not 10:21. You don't need the whole move. One clean step of the staircase, like that $1.35 run from 10:28 to 10:33, is plenty.

Quick Reference Cheat Sheet

Your Homework

1. Pull up a 1-minute SPY chart from any morning this week.
2. Between 9:30 and 10:30, mark every swing high and swing low with a dot.
3. Label each one HH, HL, LH, or LL using the candle bodies.
4. Circle the first spot the pattern broke. Ask yourself: would that have kept me out of a bad trade?

Do this five mornings in a row and you'll start seeing the staircase without trying. That's the whole point. Get in, get out, go about your day.