I used to bleed money in the marketsāuntil I refined my approach to three essential trading concepts: market structure, price action, and liquidity. Master these, and you'll trade with precision. Hereās how:
1. Market Structure: The Foundation of Every Trade
There are only three types of market conditions:
š¹ Uptrend ā Higher Highs (HH) + Higher Lows (HL)
š¹ Downtrend ā Lower Highs (LH) + Lower Lows (LL)
š¹ Range/Consolidation ā Price bouncing between equal highs and lows
2. Spotting Trends with Clarity
ā Uptrend: HH + HL = Buyers in control
ā Downtrend: LH + LL = Sellers in control
ā Range: Equal highs and lows = Wait for breakout
3. Timeframes: See the Bigger Picture
š¢ Macro Trends ā (Daily, Weekly, Monthly) for overall direction
šµ Micro Trends ā (4H, 1H, 30Min, 15Min, 5Min) for precise entries/exits
ā Pro Tip: Donāt tunnel vision on small timeframesāzoom out to avoid fakeouts and spot liquidity zones effectively.
4. BOS vs CHOCH: Spotting Trend Reversals Like a Pro
š¹ BOS (Break of Structure): Confirms trend continuation
Bearish: Price breaks below the previous low Bullish: Price breaks above the previous high
š¹ CHOCH (Change of Character): Signals a trend reversal
Occurs when price breaks the opposite structure (e.g., in a downtrend, price breaks a previous LH ā bullish shift)
5. Liquidity: The Smart Moneyās Footprint
ā Identify key supply & demand zones
ā Wait for price to retraces into liquidity pockets
ā Enter in the direction of the new trend
š Stop-Loss: Below the demand zone (invalidates trade if broken)
š Take-Profit: When a counter-trend CHOCH appears
6. Key Takeaways for Smarter Trading
ā
Identify market structure & trends with confidence
ā
Understand price action and liquidity zones
ā
Use BOS & CHOCH for trend shifts
ā
Trade with the right timeframes
I wish I had focused on these principles from day oneāit would have saved me thousands. Now, I trade smarter. Hope this helps you do the same! š”š
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