BASIC MARKET STRUCTURE

[BTC_Mouse]

BASIC MARKET STRUCTURE

Bullish Market Structure (Up Trend)-> higher highs and higher lows

Bearish Market Structure (Down Trend) -> lower highs and lower lows

Higher lows and lower highs are not confirmed until a Break of Structure (BOS)

Swing High -> highest point that caused the swing low

Swing Low -> lowest point that caused the swing high

BOS -> break of (swing) structure

After a BOS, expect a pullback on that timeframe

Internal Structure -> all structure between the swing high and low

STRONG & WEAK HIGHS/LOWS

Strong Lows -> lows that cause highs (HLs)

Strong Highs -> highs that cause lows (LHs)

Usually form with a sharp move away + larger candles

Big money has an interest in protecting those strong swing points

Goal = catch HLs and LH's (continuations) and target HH's and LL's (weak structure)

TREND CHANGE

A trend change is when the expectational order flow (EOF) fails.

In a bullish trend, the expectation is that price will continue to make higher highs and higher lows.

In a bearish trend, the expectation is that price will continue to make lower highs and lower lows.

Bullish trend change -> is confirmed once price breaks a swing lower high to form a swing higher high (bullish BOS).

Bearish trend change -> is confirmed once price breaks a swing higher low to form a swing lower low (bearish BOS).

CHoCH - CHANGE OF CHARACTER

Internal Structure -> all structure between the swing high and low

Change of Character (CHoCH) -> internal bullish structure changing to bearish structure (vice versa)

Bearish CHoCH -> the first internal lower low after a series of internal higher lows

Bullish CHoCH -> the first internal higher high after a series of internal lower highs

CHoCH - CONTINUATION

CHoCH is a useful signal that:

a Swing run (pro-trend) may be finished and a Swing pullback (counter-trend) may be starting.
a Swing pullback (counter-trend) may be finished and the next Swing run (pro-trend) is about to start.
In simpler terms, CHoCH can signal when the Swing turning points may be occurring. 

But CHoCH can give false signals, it doesn't guarantee that a Swing HL or LH has formed (pullback may not be finished).

Remember: a Swing HL or LH is only confirmed once there is a BOS.

CHoCH - REVERSAL

A Swing trend change is only confirmed once a Swing higher low or a lower high is taken out (BOS).

But CHoCH can provide an early signal that a Swing reversal may be about to occur before the BOS.

However, this can also provide false signals as the strong swing high/low can hold and the Swing trend can continue.

Remember we 'blindly' expect the trend to continue until it doesn't (we always assume strong swing highs/lows will hold and not be broken... until they are).

STRUCTURE MAPPING TYPES

TYPE 1 (Conservative)

Mapping -> Wicks

BOS -> Bodies

I always use this for BOS (swing breaks of structure).

 

TYPE 2 (Aggressive)

Mapping -> Wicks

BOS -> Wicks

I always use this for CHoCH (breaks of internal structure).

 

Type 2 is more aggressive because a wick break can just be a liquidity grab.

A candle closure above/below a structural level is a lot more significant.

 Internal CHoCH used with Type 2 mapping is very likely a Swing BOS with Type 1 on a lower timeframe [LTF].

(A wick break on the 4H is probably a candle closure on the M15).

It's aggressive, but that's what we are reading on the price action on the current timeframe, without looking down on a LTF.

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[Ararbermas]

For me if we were talking about the basic structure in the market, perhaps it should be not that much because it's too hard to understand. And you don't even indicates what time frames such structures usually appears.

For me the basics structure are these following

*Reversal patterns
*Continuations patterns
*Bilateral patterns

And what you shared above is so advanced..

[Mpamaegbu]

OP, while I acknowledge that you did well for sharing those pictures here as they're instructive for learning, I'm sure you will do well to acknowledge the source.

And you don't even indicates what time frames such structures usually appears.

Those patterns cut across all timeframes and are recognized in all of them. Though one will get a better perspective and use of them when recognized in higher TFs like daily and weekly or even monthly.

[palle11]

TREND CHANGE

A trend change is when the expectational order flow (EOF) fails.

In a bullish trend, the expectation is that price will continue to make higher highs and higher lows.

In a bearish trend, the expectation is that price will continue to make lower highs and lower lows.

Bullish trend change -> is confirmed once price breaks a swing lower high to form a swing higher high (bullish BOS).

Bearish trend change -> is confirmed once price breaks a swing higher low to form a swing lower low (bearish BOS).

This is good and nice to learn because every trader who has lost at one time or the other has done that as they didn't recognize the trend change. This trend change is important. If you are trading against the trend, you see how fast you can lose your money and expose your indicators for not being good enough. It puts you into confusion that you want to start changing even a good strategy and indicator but spotting a trend is like riding on the back of a horse. Op however, I don't think this is your original work. You provide source of information for others to visit also.

[Zilon]

Understanding candle stick formation should be the first part of the basic market structure. To get a higher high or lower low different candle stick size come together give speculation of the next market direction predicting If buyers or sellers are exhausting their grip on a trend depending on the wave formed during any time frame.

Just like in a higher high market setting if a resistance point is met and a reversal candle forms then a possible lower low formation might set in.

[JooBra]

People need to understand that even if you know all this it doesn't mean you will be a good trader. So many more other things come into consideration also. People know to focus only on TA and keep losing money. So knowing TA is a must but not only that matters.

[Cookdata]

_snip_

I gave you single merit for the effort but please resize that images the way you did to that last image on your post, they are too large, it takes time to load and this will make your page to be slower when anyone opens it.
Good hints up there just that when you are ready to trade, most of this doesn't happen in life trading, crypto conditions will make you think that these are not even needed by the time you start your trading journey but they are cool to know how the market is structure.

EDIT: I mistakenly refresh the merit page and it did give out another one. LUCKY YOU but why is that way?