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 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
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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.