Market structure consists of three states—uptrend (rising with pullbacks), downtrend (falling with rallies), and rangebound (consolidation)—where price moves through highs and lows; successful traders identify whether the market is trending or ranging by checking if the previous low holds (correction) or breaks (trend reversal), and trade at key levels where orders cluster (previous highs and lows) to achieve better risk-reward ratios, avoiding fake breakouts by waiting for clear breakout candles.
Deep Dive
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Deep Dive
This 'Market Structure' Makes Me $10,000 a Day (Not a Strategy, Not an Indicator)Added:
Those of you who've been trading for a while, let's be honest. You keep changing your strategy, don't you?
Yesterday RSI looked good, so you used it. Today, you say Ballinger band don't work and throw them away. When YouTube says this strategy is insane, you follow it. But did you read your change? Your account is probably the same or even worse. The traders who actually make money, their strategy, they barely changing. They've been using the same method for 10 years. But why are they making money? Why you are losing? The reason is simple. You only blame the strategy. But we are traders identified the market structure first. If you don't know whether the market is trending up or correcting, what do you think will happen when a massive trend explodes and it's a J where money is practically printing? You get scared and take a tiny profit and sell. On the other hand, in a choppy range that shakes price up and down, you keep holding until you give back all your profits and end up at break even or stopped out. The market you are looking at right now, is it the top, the middle, or the bottom? If you don't know that position, no matter how great your strategy is, your account will stay the same. Don't change your strategy. Just change the way you see it. Let's begin. Now, let me explain how the market moves. The market only has three states. A trending market either going up or going down or a rangebound market. But when it goes up, it doesn't just go straight up, right? It rises strongly and then pulls back. A correction comes and then it rises strongly again. Then it comes down again. It goes up by repeating this process. The segments where we rise strongly are the uptrend. After this upward move, either a correction that moves downward appears or a rangebound consolidation happens before moving into another uptrend. Even a major trend is formed by the reputation of these two paces. Even if a trending market comes into a downtrend, these two paces come first. Now how is price formed? In an uptrend, a high is formed. In a correction, a row is formed. And if this correction continues for a wrong time forming highs and lows up and down, a rangebound market appears. So to summarize, after an uptrend, a correction or a range must appear and after that either another uptrend appears or it transitions into a downtrend. A market that continues only upwards does not exist. In an uptrend after a correction, the price structure breaks the previous high and moves upward. If it fails to break the high, it forms a range and moves sideways. And if a downtrend begins from here, the correction phase occurs in the opposite direction of the uptrend. This is the base market structure. This is important because if you know this position entry timing becomes clear where the next uptrend will be, where the next correction will be and how far the next downtrend could go can be estimated from that estimation. Your target comes. But here a truly important question arise.
Is this current drop a correction before moving into an uptrend or after this correction is it transitioning into a downtrend? If you can't distinguish between these two, you will get stopped out frequently in trading. You may think it's a reversal when it's just a correction and sell too early. You may think it's just a correction when the trend has actually ended and enter a new position or keep holding until it comes back to break even or hits your stop.
There is only one criterion to identify this whether it breaks the previous row or not. When an uptrend moves into a correction, if it stops near the previous row and tries to push toward a new high again, that is a correction. It means the trend is still arrived. But if it clearly breaks the previous low, the situation changes. This means the probability of a trend reversal has increased. It means the uptrend could be over. A broken low is a signal that pressure may be ending. It is another signal to enter a short immediately.
After that, a bounce will occur. If the bounce is kept below the previous high and then brisk the row again to the downside. This is when the downtrend can be considered confirmed. To summarize, if the previous row holds, it is a correction. The main trend remains intact and you can continue holding. If the previous row is broken, there is a possibility of the trend reversal. At that point, you should drop your bullish bias and observe. And if a downtrend forms with lower highs and lowers, it is correct to confirm the main trend as bearish. Put this sequence into your mind as market structure. Now then you understand how price moves. You now need to see where orders and capital are concentrated. Structure is the line that is drawn and orders are the points that create that line. Price is formed through the trading orders of market participants. When buy orders pull in, price rises sharply and when sell orders pull in, price drops sharply. The market moves entirely because of the orders of the market participants. Then where are these orders most concentrate? Earlier when we talked about market structure, we said that when a uptrend ends, a high is formed and when a correction ends, a row is formed and when the correction continues, it forms a range creating many highs and lows. But at these highs and lows, candles with the wrong wigs open begin to appear. Why is that? When you enter wrong position, where do you place your stop loss? you place it below the row, right? And when you enter a shirt at a resistance rebel, you usually place your stammers above that resistance rebel, right? So what happens above the highs and below the rows countries buy and sell stop orders begin to accumulate. They are act the same way. On top of that, there are traders who only trade breakout. They wait to enter in the direction once the high or row is broken. Those orders are also stacked above and below as buy stops and sell stops. Now let's think from the perspective of smart money. Thousands of sell stop orders above the high, thousands of new breakout buy orders.
How does that level look to them? It looks like a place to grab free ricketity, doesn't it? They see as a place to absorb volume. So institutional traders intentionally push price above the high, trigger those stops and buy orders, absorb them and then bring price back down. This is called the stop hunting. It is a preliminary move before making a new high. But if you understand how the market moves, you can see in advance where this stop hunting will occur. The place where the uptrend ends where highs overall two or three times.
These are all levels that smart money targets. We can gain two trading ideas from this. If price clearly fails to break through the supply zone at the high, you won't chase the breakout and you can get ideas for setting your target. This is why when you understand market structure, you can achieve an efficient riskto-reward ratio. Even just knowing where market participants orders are clustered reduces the chances of getting trapped. But there are a lot of fake whips moves in the market. When you look at the chart, price tries to break the high and open comes straight back down. If you enter a buy, every time you think it's a breakout, you end up getting trapped at the very top and the position that was in profit, you fail to close it with a good risk to reward trade. Look, you could have captured all the way to here. So, you need a way to distinguish the criterion is to come from whether it clearly broke through.
For an uptrend to begin, agreement among market participants must appear and new orders must come in strongly. So it closes with a clear clean candle. Then no one can dispute. If not, it is all a fake freak out. Getting threat to buying at the top or selling at the bottom can be filtered out with this method alone.
If it is at the beginning of a trend, you can see it as the start of the first uptrend. After correction or a range, if an uptrend appears again, you can judge that the second uptrend is beginning.
How important this close is? I will cover much more deeply in the next video. With this one close, it greatly affects your riskto-reward ratio and win late. Subscribe, like, and turn on notifications right now so you can receive the next video immediately. Now I will combine everything we have run so far into one. Market structure and where orders are clustered and identify whether it has broken out. These are not separate concepts. There are all include within one trading model. There are exactly three conditions. Trend direction. What is the current main trend range detection whether it is failing to update highs and lows that kind of box and breakout and pullback after clearly breaking a supply jone is support now appearing that's it first you need to determine whether the market structure is in a downtrend or an uptrend from there you need to identify which market structure it belongs to expansion or correction if rows are rising, it is an uptrend. If highs are failing, you can initially judge it as a downtrend. If it is an uptrend and not even in a range, you wouldn't do something foolish like entering a short immediately. Even if you take such counter trend trades, you should do it inside the range or when it transitions from a range into a downtrend. So even those who were constantly making money with counter trend trading but are now experiencing consecutive stop losses this video will help you. The reason is that you are trading against a clear uptrend. We are going to trade with the trend. Once you have identified what market structure you are in the next step is to detect the range. When you discover this range, it is good for beginners to mark the top and bottom of the box. After the range, the move will be one of two directions. It either breaks down through the lower supply zone or it goes to try the high again.
The final direction is only one of these two. How long the range continues inside and how much price action forms inside it? Is it up to the big players? If the candle body breaks above the top of the box, the uptrend has begun. But you don't enter right here. After it pushes up once into uptrend, a correction comes again. How far does this correction come down? It comes down near the top of the box that was just broken. Then this is the best area to buy. Why is this rubber good? Because the level that was previously the top of the box now turns into support. People it was broken it was a resistance but after a breakout it becomes support. Let's take an example on the chart. It is moving up while obtaining the heights and the uptrend moves upward and the correction moves downward and it is rising while making higher rows. Right? And in this section a range has formed. It's moving sideways. Right? It goes back and forth around similar rebels, failing to update the rows and failing to update the highs. So, a range has now formed at the top and bottom of this box. Buy and sell orders are now heavily staked. And after moving sideways within the range, it brings above the top of the box with a clear breakout candle. Now, this is the beginning of the uptrend. And you don't enter right here. It's more favorable to wait until it pulls back to the box.
This is how you catch the early phase of the uptrend. The first target is set at the high of the previous upward move because that's the area where smart money usually conducts stop hunting. If you decide to hold for a wronger move, you can send your target as a multiple of the current box. You can aim for 1x, 2x, or even more of the box for profit now. The chart probably looks a bit different, right? Even when looking at the exact same chart, some people say, "I have no idea where this is going."
And they gamble. And others say, "Ah, this is where I should stay out." And they wait. I guarantee you the strategy you are using it is good one. But without this market structure map I talked about today, your account will inevitably trend downward. Even if you forget everything else, bond this into your memory the four absolute rules.
First, the market breathes. Nothing goes up endlessly. If there is an unmove, a correction will follow. Don't failing.
Second, check the lifeline. If the previous row holds, it's a correction.
If it breaks, it's a trend reversal.
This one line saves your account. Third, pick at the target of the smart money at the previous high and previous row.
That's where the money is staked. Smart money will always go there to touch it.
First, don't be fooled by the wick. If it's not a clear breakout, it's smart money trap. The moment these four things are embedded in your mind, the strategy you've been using will confidently become a new weapon. But if you just watch it and turn it off, you will forget it again tomorrow. If you want to truly make what you run today your own and train hard with me, check the description below. Thank you.
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