What is a Lower High (LH)?

What is a Lower High (LH)?

A lower high forms when a rally stalls below the previous swing high. It signals that sellers are stepping in earlier, often foreshadowing a downtrend.

Lower High Insights

• Trend confirmation: Lower highs paired with lower lows define bearish structure.
• Supply zones: They frequently align with prior resistance or imbalance areas.
• Momentum shift: Failure to break the old high hints that demand is fading.

Trading Lower Highs

• Mark each lower high to draw descending trendlines that guide trade direction.
• Enter on retests that respect the lower high and reject the level decisively.
• Trail stops above the latest lower high to manage risk as price cascades lower.
• Reassess the bearish bias if price closes above a prior lower high.

Practical Playbook

• Define context on higher timeframes, then execute on intraday charts.
• Wait for confirmation (acceptance, momentum, or confluence) before entry.
• Size positions conservatively and place stops at clear invalidation levels.
• Adapt to session dynamics; conditions shift between Asia, London, and New York.

Common Pitfalls

• Forcing trades without alignment across timeframe, structure, and catalyst.
• Ignoring spreads/slippage during news or thin liquidity.
• Moving stops or adding to losers instead of honoring the plan.

Practical tip: define three trade types—trend continuation after a Kagi thickening, first pullback to the Kagi flip level, and failed break reversion when price rejects beyond a prior Kagi swing. Each requires a clear trigger on the execution chart (close back inside, momentum shift, or reclaim), predefined invalidation beyond structure, and position sizing aligned to volatility. Document outcomes by session so you learn when each pattern has the highest follow‑through.

Illustrative Example

Build a simple playbook: identify bias, mark key zones/levels, define triggers and invalidation, and pre‑set targets for 2–3R. Journal results by session and setup to refine rules. Over time, consistency—not prediction—drives outcomes.

Practical Playbook

• Define context on higher timeframes, then execute on intraday charts.
• Wait for confirmation (acceptance, momentum, or confluence) before entry.
• Size positions conservatively and place stops at clear invalidation levels.
• Adapt to session dynamics; conditions shift between Asia, London, and New York.

Common Pitfalls

• Forcing trades without alignment across timeframe, structure, and catalyst.
• Ignoring spreads/slippage during news or thin liquidity.
• Moving stops or adding to losers instead of honoring the plan.

Illustrative Example

Build a simple playbook: identify bias, mark key zones/levels, define triggers and invalidation, and pre‑set targets for 2–3R. Journal results by session and setup to refine rules. Over time, consistency—not prediction—drives outcomes.