hello Traders and welcome back to

another episode of smart

risk accurately identifying and mapping

the market structure along with its

crucial elements is the initial key step

that every Trader must take on their

trading Journey for success and

profitability one of the primary reasons

many Traders face losses is their

failure to properly identify and

understand the market structure in this

episode we explain both Advanced and

basic concepts of Market structure that

are essential for every Trader to

understand and apply in their trading

Journey additionally we will unveil the

keys and tips for Market structure

mapping propelling you one step ahead in

the market be sure to watch the entire

video slowly until the end and take

notes for a better and more

comprehensive understanding so Traders

if that's something you're interested in

please give this video a thumbs up to

show your support and subscribe to our

Channel if you are new see you after

intro

[Music]

[Music]

welcome back Traders so let's get

started with the market structure

General Behavior the Dynamics behind

Market movements can be boiled down to

two key factors that consistently

influence price Direction trending which

includes uptrend and downtrend and the

second factor is the consolidation phase

like a choppy or ranging Market imagine

it like a continuous Circle where price

always moves between downtrends uptrends

and also consolidations that accumulate

liquidity and institutional orders price

usually needs to consolidate between

uptrends and downtrends and vice versa

the first question to consider when

opening charts on your screen is whether

the market is in an uptrend downtrend or

consolidating phase to gain a solid

understanding let's begin with a basic

introduction to Market structures and

then delve into the key points of

advanced Market

structures consider a market structure

that represents an ideal uptrend I refer

to this type of Market structure as

ideal because it is rare to find an

uptrend in the market that exactly

mirrors this pattern prices typically do

not behave with such Simplicity

nonetheless for a clearer understanding

of an uptrend let's briefly take a look

at this ideal structure before moving on

to a more realistic uptrend structure

that frequently emerges in the market in

an uptrend prices consistently form

higher highs and higher lows the price

typically breaks the previous highs

while holding the lows an uptrend ends

when the price breaks one of the major

lows to the downside for example to

maintain the uptrend it's crucial that

price does not break this major low

whenever the price breaks a major High

to the upside it forms a break of

structure and establishes a demand Zone

associated with the BOS

wave identifying valid major highs and

lows is critical as it enables us to

detect signals for a trend reversal or

continuation in the market without

proper identification of these pivotal

points there is a risk of falling into

traps and trading on the wrong side of

the market the same Concepts apply to

the bearish

scenario in a downtrend prices

consistently create a series of lower

lows and lower highs in this scenario

the price has a tendency to break the

previous lows while maintaining the

highs now let's delve into the details

of the realistic Market

structure this represents the realistic

uptrend structure that is more commonly

observed in the market market now let's

consider a scenario where the price

breaks the previous highs to the upside

at this point a crucial question arises

how do we identify valid major highs and

lows to address this if we look at the

left side of the structure it is clear

that price experienced an upward

movement until it started to retrace the

highest point reached by the price

before the retracement movement began is

considered the major High additionally

the lowest point of the bullish wave

that in initiated the upward movement

leading to the formation of a break of

structure and a new high is recognized

as the major

low these two points constitute the

major external structures and every

structure formed between them is

regarded as an internal

structure if the price breaks the major

High to the upside creating a break of

structure BOS it signals a continuation

of the

trend however if the price Falls below

the major low we should consider it as a

trend reversal signal signal the

specific internal price action within

the range of external structures doesn't

matter as long as the price remains

above the most recent major low as long

as this condition is met we consider the

market to be in a bullish State now that

we've identified the recent major

external structures these structures

Define the current area of interest and

the current trading range as we see the

price has entered the retracement phase

generating a series of internal

structures particularly bearish

ones subsequently after forming a

bullish internal realignment the price

breaks the recent major High to the

upside establishing a fresh major high

and low the newly generated major low is

this internal low situated at the

extreme this low is considered major

because it is the last low created

before the price initiated an upward

movement leading to the break of

structure you might be wondering why we

don't regard this low structure as the

major low the rationale behind this is

that the low located at the extreme is

the ultimate and lowest point before the

price initiates an upward movement this

particular low is crucial as it is the

key low that triggered the upward

movement and subsequently the break of

structure moving on to the bearish

scenario which is simply just the same

as the bullish scenario initiating the

bearish wave leading to a break of

structure additionally we have a major

low marking the lowest point the price

reached after the break of structure

these two structures the major high and

low constitute our external structures

while everything formed between them is

considered internal

structures if the price breaks the major

lows to the downside creating a break of

structure it signals a continuation

Trend like what we see here however if

the price rises above the major High we

should consider it as a trend reversal

signal in simpler terms the nature of

internal price action within the

external structures doesn't matter as

long as as the price remains below the

most recent major High indicating a

bearish market as the price retraced

upward it formed a series of internal

highs and lows within our trading range

however it eventually went back down and

broke the recent major low to the

downside this internal High located at

the extreme becomes our newly generated

major high this is because it represents

the highest internal High created before

the price initiated a strong bearish

push resulting in a new break of

structure following this the price

retraced once more forming another major

low subsequently after creating various

internal structures the price continued

its downward momentum establishing a

sequence of lower lows and lower

highs now we will delve into another

crucial aspect of Market structure the

break of structure

BOS you've likely encountered BOS in

various trading tutorials Market

structure videos and trading handbooks

for example in a bullet structure is

often defined simply as a situation

where the price breaks a high to the

upside however in reality there are

specific rules and key points that we

must consider to identify a valid break

of structure now let's move on to the

specifics of those key points and

rules a valid break of structure occurs

when the price breaks and closes above

the most recent higher high with the

body of a candle this holds true even if

the price immediately moves downward

after breaking the structure in this

scenario the price generates a new major

low and major High and establishes a new

trading range if the price subsequently

breaks this newly regenerated major low

to the downside it indicates a potential

Trend reversal this shift signals that

the price is no longer bullish marking a

change of

character however if price breaks the

recent higher high with a long Shadow or

Wick and the body of the candle promptly

closes below the range of the high with

the subsequent candle's Wick not

surpassing the first candle's Wick we do

not consider this scenario a valid break

of

structure in this case we regard this

low as an internal structure formed

inside our trading range to identify a

trend reversal signal or a valid change

of character we should wait for the

price to break the major low located at

the extreme rather than Breaking the

upper internal

high now consider another scenario if

the price breaks the recent higher high

with a wick and then the body body of

the first candle closes below the range

of the high with the subsequent candle's

Wick exceeding the first candle's Wick

we can consider it a valid bullish break

of structure in this case we have a

newly formed major High and a major low

defining our updated trading range the

nature of internal price action within

the range of this high and low doesn't

matter as long as the price remains

above our newly generated major low

indicating a bullish Market only if the

price breaks the newly formed low to the

downside we can consider it a valid

Trend reversal signal or a valid change

of character pattern now let's briefly

break down the bearish scenario which is

essentially the same as the bullish one

consider a bearish market structure to

have a valid break of structure we

require the price to break and close

below the most recent lower low with the

body of a candle therefore if the price

breaks the newly generated major High to

the upside we consider it as a trend

reversal signal indicating that sellers

have lost

control conversely if the price breaks

the recent lower low with a long Shadow

or a wick and the body of the candle

promptly closes above its range with the

subsequent candle's Shadow not

surpassing the first candle's Wick we

should not regard it as a valid break of

structure to establish a genuine bearish

break of structure we should wait for

the price to close below the low's range

with the body of a

candle on the other hand if the

subsequent candle candle's Wick exceeds

the first candle's Wick and closes above

the lows range then we have a valid

break of structure additionally we need

to update our major low and major high

as long as the price remains below our

newly generated major High we consider

the Market's direction is bearish only

if the price breaks the newly formed

High to the upside we are allowed to

consider it a valid Trend reversal

signal or a major change of character

having explored various types and

scenarios of break of structure patterns

and now possessing a solid understanding

of a valid BOS let's delve into another

key factor of Market structure mapping

change of character to identify a valid

change of character the first step

involves determining the General market

Direction whether it's in an uptrend or

downtrend subsequently you must

highlight the valid break of structures

on your price

chart in the bullish scenario imagine

the price creating a series of valid

break of structures this low and high

represent our major structures

associated with the first valid bullish

BOS as previously mentioned any price

action forming between these two

structures is considered

internal change of character patterns

can be categorized into two types minor

and major for example each time the

price breaks any internal low it

signifies a minor change of character

it's important to note that a minor

change of character alone cannot be

regarded as a sign of a shift in the

market structure

here we facing a common scenario that

frequently occurs in the market many

novice traders who haven't correctly

identified the market structure often

consider this minor change of character

a signal of a reversal in Market

Direction They believe that the bullish

phase has ended and it's an ideal time

to go

short they typically Place their stop

loss just above this internal High

however contrary to their expectations

price after making a brief retracement

went back up and continued its bullish

movement this resulted in hitting the

stop loss of traders who had taken short

positions they often failed to realize

why their stop loss was triggered by the

price and unfortunately they repeat

these actions

repeatedly what they missed here is a

crucial point the price didn't break

this major low over here to confirm a

market structure shift they shouldn't

have entered a short position until the

price broke the last major low to the

downside their identified change of

character was invalid and the price only

was in its retracement phase before

continuing to its primary direction to

obtain a valid Market structure shift

signal one should patiently wait for the

price to establish a major change of

character by breaking and closing below

the last major low that initiated the

upward movement leading to the bullish

break of

structure furthermore it's crucial to

always remember that in a bullish

scenario a change of character pattern

is considered valid only when the price

breaks and closes below the last major

low with the body of a

candle if the price breaks the most

recent structure with a long Wick or

Shadow and closes within the high's

range then the change of character is

invalid and we cannot consider it a

market structure

shift the same concept applies to the

bearish scenario for a valid change of

character that provides a high

probability we need the price to break

and close above the recent major high

with the body of a candle a pen ation

with a shadow or Wick is not

acceptable that's it Traders thank you

for watching this video I hope you found

it informative and useful don't forget

to hit the Subscribe button and turn on

notifications to stay updated on our

latest videos we value your feedback and

suggestions so please leave your

comments below and let us know what

topics you'd like us to cover in our

future videos we appreciate your support

and look forward to seeing you in the

next episode