Market structure
Structure is the sequence of price turns. As long as highs and lows keep rising, the trend is up.
Market structure — what it is?
Market structure is the sequence of significant highs and lows. It answers the one question every piece of markup starts with: where is the market going right now.
An uptrend structure means every high and every low is higher than the last. A downtrend is the mirror image. A sideways structure has its swing points at roughly the same level.
Everything else is secondary. An order block, an imbalance, a demand zone only mean something inside a structure you have already read: against it, the same objects work noticeably worse.
Market structure — how it is built?
Structure has three levels: higher, internal and micro. On the chart they are separated by colour — black, red, green. The levels must never be merged into one sequence: a break of micro structure does not cancel the higher one.
Market structure — common mistakes
Marking every wiggle and ending up with a structure in which nothing is visible.
Mixing swings from different levels.
Reading structure only on your working timeframe without checking the higher one.
Re-drawing structure after the fact so that it justifies an open position.
Related to
Glossary
- uptrend
- a sequence of higher highs and higher lows.
- high
- the highest price of the period.
- low
- the lowest price of the period.
- downtrend
- a sequence of lower highs and lower lows.
- swing
- a local extreme, the point where a move turns.
- Order block
- the last candle in the opposite direction before the impulse that broke structure.
Test yourself
Where is the high lower than the previous one — the trend reversed?
Correct. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →
Not this one. The right answer is the other chart. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →