MARKET STRUCTURE
What is Market Structure?
Market structure by definition is the simplest form of price movement in the market and is being to read it. It is basic support and resistance levels on the charts, swing highs, and swing lows. These are levels, which are easily identified and hold until they don’t. Market structure is a trend following tool that traders read and follow based on how an asset moves. From bullish moves, to bearish and in between with ranges.
Market Structure is often referred to as Price Action. We refer to this study as market structure because it’s how the whole market moves. Understand the trend and the anticipated moves and then you can add other criteria to your trade qualifiers. Like volume, pivot points, moving averages, and more. Which we will talk about slightly at the end of this discussion.
Types of Market Structure
1.Bull trend
2.Bear trend
3.Sideways trend
Bullish Trend
No matter which way you look at a chart you will find a trend of some sort. Regardless of what the timeframe is you can find a trend. The key for the bullish trend to hold out is for consistent higher highs and higher lows. There are two key criteria here and understanding how they move will allow you to understand when that trend is over!
The higher low aspect is the first part. When price pulls back from a push higher will it create a higher low? The worst-case scenario is that we form an equal low that is still considered the bull trend holding. There is a caveat in this circumstance. Will the price make a new high off that base? Should the trend make a new high, the trend will continue. Should the move fail to make a new high then you have to be cautious on the next test of support.
That means it’s pivotal for the trend to at least make an equal or higher low to have a chance of continuing.
Market structure by definition is the simplest form of price movement in the market and is being to read it. It is basic support and resistance levels on the charts, swing highs, and swing lows. These are levels, which are easily identified and hold until they don’t. Market structure is a trend following tool that traders read and follow based on how an asset moves. From bullish moves, to bearish and in between with ranges.
Market Structure is often referred to as Price Action. We refer to this study as market structure because it’s how the whole market moves. Understand the trend and the anticipated moves and then you can add other criteria to your trade qualifiers. Like volume, pivot points, moving averages, and more. Which we will talk about slightly at the end of this discussion.
Types of Market Structure
1.Bull trend
2.Bear trend
3.Sideways trend
Bullish Trend
No matter which way you look at a chart you will find a trend of some sort. Regardless of what the timeframe is you can find a trend. The key for the bullish trend to hold out is for consistent higher highs and higher lows. There are two key criteria here and understanding how they move will allow you to understand when that trend is over!
The higher low aspect is the first part. When price pulls back from a push higher will it create a higher low? The worst-case scenario is that we form an equal low that is still considered the bull trend holding. There is a caveat in this circumstance. Will the price make a new high off that base? Should the trend make a new high, the trend will continue. Should the move fail to make a new high then you have to be cautious on the next test of support.
That means it’s pivotal for the trend to at least make an equal or higher low to have a chance of continuing.
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