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Lower High Meaning

A term in technical analysis used to describe a price peak that is "lower" than the previous peak. In a price chart, a series of "Lower Highs" and "Lower Lows" is the classic definition of a Downtrend (Bear Market).

A "Lower High" indicates that the "Bulls" are losing strength. Each time they try to push the price back up, they run out of steam at a lower point than before.

Traders look for this pattern to know when to "Exit" their long positions or "Start" a short position. The pattern is only broken when the price creates a Higher High.

This "Change of Character" (ChoCh) is often the first signal that a bear market is ending and a new uptrend is beginning. Understanding these basic "Market Structures" helps investors avoid "buying the dip" in a market that is still fundamentally trending downward.

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