The amount that one directional leg retraces into the territory of the previous leg. Structural overlap measures leg-to-leg retracement, not ordinary candle-to-candle friction.
Full Explanation
Structural overlap describes how deeply one movement trades back into the territory established by the movement before it. It is related to friction, but it operates at a larger scale. Friction is candle-to-candle overlap. Structural overlap is leg-to-leg overlap.
A directional structure with limited overlap keeps most of its previously gained territory intact. Pullbacks occur, but they do not repeatedly erase large portions of the prior expansion. Heavy structural overlap means successive legs are trading deeply back through one another, which weakens the case that one direction is maintaining control.
This helps separate a healthy pullback from a market that is losing directional organization. The question is not whether price moved against the dominant direction at all — pullbacks are normal. The question is how much territory the counter-move reclaimed and whether the original direction resumes before the structure that supported the thesis is lost.