Do you know what a structure break and a trend break are? If not, that's a shame — it helps in trading!
* The structure on the chart — is the nearest maximum (BoS).
* The trend on the chart — is the two previous nearest maxima (ChoCh).
Need an example? Let's go!
The chart shows two levels:
1. BoS — structure broken.
2. ChoCh — trend not broken.
How to interpret this data?
* A structure break (BoS) occurs regularly and is the first signal of a new strong player appearing in the opposite direction.
* A trend break (ChoCh) confirms the hypothesis of the appearance of a new strong player in the opposite direction.
Is this information a guarantee? Definitely not!
I have seen many cases where after BoS and ChoCh, the price returned to the initial movement and ignored both the structure and the trend.
This happened due to market inefficiency overlap (FVG) by the market maker.
And if you don't know what FVG is, then I sincerely sympathize with you!
That said! This information increases the chances that you started moving in the right direction.
There are 100500 nuances: where exactly not to enter a trade, and where it might be worth trying.
But that's a topic for future messages.
