L2.1 — External Structure: The Major Swing Points That Define the Trend

External structure refers to the major swing highs and swing lows that define the dominant trend. These are the points where price made a significant high before reversing, or a significant low before bouncing. They are visible on the chart to any experienced analyst and they represent the structural skeleton of the market.

When identifying external structure, the test is simple: would this swing point be visible and meaningful on the next timeframe up? A swing high on H4 that is also a clear high on the daily qualifies as external structure. A minor H4 peak that disappears into noise on the daily does not.

External structure is what most traders mean when they talk about "key levels." These are the areas where large participants made decisions. Price tends to react at these levels not because of magic, but because other analysts mark the same points and position around them — creating self-reinforcing behaviour at predictable areas.