The Trend-Follower's Trap: Near-Equal Highs and Lows
The trend-follower's trap: near-equal highs/lows.
Before you start: Easier once you understand basic swing highs/lows and liquidity.
Part of the My Edge Official framework — refined through thousands of hours of chart study.
Trend followers often fall into the same trap: they see two highs that look "almost identical" and assume a breakout must follow. Relative Equal Highs & Lows explains why these seemingly equal levels are more often a liquidity trap than a continuation signal.
- Core Idea
- Why It Exists
- How Professionals Read It
- Practical Application
Picture two highs on the chart sitting at almost the same level — not identical, but close enough that anyone looking at the chart thinks "there's probably a breakout coming here."
That's exactly why it's dangerous: a lot of people leave pending orders there (stop-losses, entry orders), thinking it's a strong level. The program driving price "knows" this — and would rather scoop up those pending orders (liquidity) before continuing on its real path.
So these two almost-equal levels aren't a breakout signal, they're a liquidity trap. Only once price actually breaks through the level and "clears out" the pending orders is that a sign something real might happen — not before.
The difference from "true" equal highs/lows: here the levels aren't perfectly identical, just close enough to function as a single liquidity trap.
Advanced explanation⌄
Core Idea
They form when multiple swing highs or lows develop within a similar price range, are visually close enough to represent a shared liquidity pool, and the area remains unswept.
Why It Exists
Relative Equal Highs (REQH) and Relative Equal Lows (REQL) are liquidity references that identify areas where resting liquidity is likely to exist. Unlike "true" equal highs/lows, relative equal highs/lows don't require price levels to be perfectly identical — they represent highs or lows close enough together to attract liquidity.
How Professionals Read It
Before using them, assess: higher-timeframe context, draw on liquidity, market structure, session, timeframe, and nearby PD Arrays.
Never trade REQH/REQL in isolation. After liquidity is taken, wait for a market structure shift (MSS), displacement, lower-timeframe price action, and PD Array confirmation.
Practical Application
| Criterion | True Equal Highs/Lows | Relative Equal Highs/Lows (REQH/REQL) |
|---|---|---|
| Price-level requirement | Nearly identical price levels | Close enough to represent the same liquidity pool, not identical |
| What it represents | A precise repeated level | Highs/lows "close enough together to attract liquidity" |
| Formation criteria | N/A — defined by exact match | Multiple swing highs/lows within a similar range, visually close, area unswept |
How to Use It
In practice:
- When you see two or more highs/lows that sit at "roughly" the same level, mark them as an REQH/REQL liquidity zone, not as a support/resistance level that will "hold."
- Wait for price to actually take out (sweep) that zone before considering a trade in the opposite direction — proximity of the highs alone isn't a signal, it's only a warning that liquidity exists there.
- After the sweep, require full confirmation (MSS + displacement on the lower timeframe) before entering — REQH/REQL only tell you where the trap is, not when it's time to enter.
Don't stop here — see how this fits with the rest of the framework.
Continue to Liquidity Runs →Frequently Asked Questions
What are Relative Equal Highs and Lows (REQH/REQL)?⌄
REQH and REQL are liquidity references marking areas where multiple swing highs or lows sit close enough together to represent a shared pool of resting liquidity, without needing to be perfectly identical price levels.
How do I trade Relative Equal Highs and Lows?⌄
Don't treat the proximity alone as a signal — wait for the zone to actually be swept, then require a market structure shift, displacement, and PD Array confirmation before considering a trade in the opposite direction.
What's the difference between "true" equal highs/lows and relative ones?⌄
True equal highs/lows require nearly identical price levels; relative equal highs/lows only require closeness sufficient to represent the same liquidity pool, which is why they show up far more often on a chart.
Why do trend-followers get trapped by these levels?⌄
Traders often see two near-identical highs and assume a breakout is coming, when in this framework that proximity usually marks a liquidity pool set up to be swept rather than broken through cleanly.