Identifying highs and lows, both of individual bars (or candlesticks) and of a section of a graphical trading chart, is a task that seems obvious and easy, but is a task that is often performed incorrectly. Many trading techniques and trading systems use highs and lows of individual bars (or candlesticks) and high and lows of sections of graphical trading charts as part of the market analysis and trading decision making process, so a trader knowing how to identify highs and lows correctly can be the difference between a trading technique or trading system being profitable or not.
Highs and Lows of Individual Bars (or Candlesticks)
Identifying the highs and lows of individual bars (or candlesticks) are the easier of the two types of highs and lows to identify (the other type of highs and lows being the highs and lows of a section of a graphical trading chart).
The high of an individual bar (or candlestick) is the highest price that was reached during the time frame that is represented by the bar (or candlestick), and visually is the highest point of the bar (or candlestick). The low of an individual bar (or candlestick) is the lowest price that was reached during the time frame that is represented by the bar (or candlestick), and visually is the lowest point of the bar (or candlestick).
The images provided above show an individual bar (view the full size image) and an individual candlestick (view the full size image) with the open, high, low, and close identified. A complete description of each individual piece of an individual bar and candlestick are available in my articles describing how to read an individual bar and how to read an individual candlestick.
Highs and Lows of a Graphical Trading Chart
Identifying the highs and lows of an entire graphical trading chart (or a section of a graphical trading chart) are the more difficult of the two types of highs and lows to identify (the other type of highs and lows being the highs and lows of an individual bar or candlestick).
With individual bars (or candlesticks) there is only one possible high and one possible low (see the explanation above), but with entire graphical trading charts or a section of a graphical trading chart there are absolute highs and lows and intermediate highs and lows (all of which are usually known as highs and lows without the absolute or intermediate qualification).
The absolute high of a section of a graphical trading chart is the highest price that was reached during the trading that is shown on the chart, and visually is the highest point of the highest bar on the chart. The absolute low of a section of a graphical trading chart is the lowest price that was reached during the trading that is shown on the chart, and visually is the lowest point of the lowest bar on the chart.
The intermediate highs of a section of a graphical trading chart are the absolute highs of smaller sections of the same graphical chart. In order to qualify as an intermediate high, the bar (or candlestick) in question must have lower bars (or candlesticks) on either side (i.e. a bar with a lower high and a lower low on both the left and right hand sides of the bar that represents the potential intermediate high). The intermediate lows of a section of a graphical trading chart are the absolute lows of smaller sections of the same graphical chart. In order to qualify as an intermediate low, the bar (or candlestick) in question must have higher bars (or candlesticks) on either side (i.e. a bar with a higher high and a higher low on both the left and right hand sides of the bar that represents the potential intermediate low).
The image provided above (view the full size image) shows a section of a graphical trading chart with the absolute high, the absolute low, the intermediate highs, and the intermediate lows identified.
Highs, Lows, and Chart Time Frames
Highs and lows are identified using exactly the same process on every time frame of graphical chart (e.g. five minute, ten minute, etc.). Sometimes the same highs and lows will be visible on multiple chart time frames (e.g. an intermediate high on a thirty minute chart might be an absolute high on a similarly sized section of a five minute chart), but sometimes the same highs and lows will not be visible at all on a longer chart time frame (e.g. an intermediate high on a five minute chart might not be visible at all on a thirty minute chart (because the five minute bars that created the intermediate high are contained within a single thirty minute bar)).