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Market Structure Basic

Market structure provides clues for analyzing markets. It determines the trend direction and hints at changes. Price action forms structures in trends, consolidations, or range-bound phases. Reading multiple time frame structures together, from higher to lower, allows traders to identify opportunities based on order flow and shifts between strong and weak points.

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Ducog Jhory A
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100% found this document useful (4 votes)
1K views21 pages

Market Structure Basic

Market structure provides clues for analyzing markets. It determines the trend direction and hints at changes. Price action forms structures in trends, consolidations, or range-bound phases. Reading multiple time frame structures together, from higher to lower, allows traders to identify opportunities based on order flow and shifts between strong and weak points.

Uploaded by

Ducog Jhory A
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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M A R K E T

STRUCTURE
MS
Market structure gives you a
clue when analysing the market.
When you follow market
structure you can easily
determine the flow of the
market and place trades based
on the trend direction. Market
structure forms and gives you a
hint when the market comes to
a stop and starts a new
directional trend. Reading
market structure gives you a
general idea of price action.

Int ro
Expansion
⦿ Uptrend

⦿ Downtrend

Or

Consolidation
Otherwise, know as range bound PA

Price
Can be found in one of
these phases
Consolidation / Range
Expansion
Up Trend
HH
Bos

HH
Bos

HL
HH
Bos

HL
HL
Bullish Orderflow

Down Trend
Bearish Orderflow
LH
LH

LL Bos
LH

Bos
LL

LL
Trend
Change
HH

HH
Bos LH
HH
Bos
HH
Bos LH
ChoCh ChoCh
HL
Bos
LL
HL HL
Bos
LL

LL
HH

HH

LH

ChoCh
HL

Bos
LL

CHOCH VS BOS

BOS is short form of Break of Structure,


it is used when there is a continuation
in trend, In order for price to continue
in the same direction it was heading,
price must break the previous swing,
and expect trend continuation. Choch
is short form of Change of Character,
can be viewed as the Markets turning
point I.e. Bullish to Bearish, Bearish to
Bullish trend change.
Top
Analysis
Down
Swing High

External Liq Objective

Short on counter trend,

Target Objective internal Liq

M15 structure shifted


HTF Bullish Structure

H4
Choch
Bos
Choch

MTF Pullback

M15

LTF Execution

M3 -M1

Demand Zone

HL

Extreme

Swing Low

Fractal Orderflow
F r a c t a l

Market structures are fractal


HTF Structure
MTF Structure
LTF Structure

HTF Orderflow
External
Internal
Structure
Targeted High
Bos

Targeted High
Bos

Targeted High
Bos

Protected Low

Protected Low

Protected Low

Bullish Orderflow

External / (Swing) structure:

Structural ranges / trends created by swing


Swing Points
points on HTF

External Structure
Internal / (Sub) structure:

LTF price movements inside of external structure

Internal Structure
Shifts in internal structure can be used to predict
a reversal in external structure.
Strong / Weak Structure

Strong/Weak highs & lows are also


referred to as Protected and Targeted
Highs/Lows. A low's job is to run a high. A
high's job is to run a low. If a low puts in a
new high (Bos) it is considered a strong
(Protected) low. If a high makes in a new
low (Bos) it is considered a strong
(Protected) high. applying the same
theory, let's say we're constantly making
new highs and suddenly we fail to put in
a new high, what happens to the low? It's
considered a failed reaction and now
that low becomes a weak/targeted low.
similarly, If we're consistently putting in
new lows, and we fail to put in a new low,
that high becomes weak/targeted high
and will likely be run. We must take orders
at the strong points and take profits,
generally at the weak points.

Up Trend Down Trend

Weak high
Bos Strong high

Weak high Strong high


Bos
Weak high Strong high
Bos

Strong low Bos


Weak low

Strong low Bos


Weak low

Strong low Bos


Weak low
Structure Mapping

HH HH

HH
H H Bos
Bos Bos

Bos
HL
HL LL

L L
Conservative Aggressive
Disclaimer
Reference

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