Market Structure Guide

When the the the the price approaches any support/resistance level we as Traders have 3 types of decisions that we can make:

1️⃣→ Bet on a breakout (Momentum).

2️⃣→ Bet on a bounce (Mean reversion).

3️⃣→ Take no trade.

As a Trader you have to get used to picking Option 3... a lot.

Before jumping into a trade it can be quite helpful to have a little bit of context.

Looking at the current Market Structure is a good place to start.

🐂Bullish Market Structure: higher highs and higher lows.

🐻Bearish Market Structure: lower lows and lower highs.

Break in Market Structure

Jthe the the ust because a a Bullish Structurerererereas Bulat it wicontinue to rise indefinitelyndefinitelyndefinitelyver.

There ar,,,,,,e going to be times where the structure "breaks" and price can potentially turn around and start moving in another direction.

Just because a Lower High comes in does NOT mean the structure has broken yet

The structure is only broken when the Lower Low comes in.

A Lower Low = the break of the most recent swing low that was formed.

Just because a Higher Low comes in does NOT mean the structure has broken yet.

The structure is only broken when the Higher High comes in.

A Higher High = the breach of the most recent swing high that was formed.

Mean-Reverting Markets (ranging)

When the direction of price isn't clear because it just keeps reversing from the same highs/lows over and over again, this is a Mean Reverting Environment.

This type of environment is:

✅the BEST for trading reversals

❌the WORST for trading breakouts

Momentum Markets (trending)

When the Market Structure of a move appears to be Bullish or Bearish for a consistently long duration, then you're looking at Trending Price Action.

Common characteristic of strong Trending Price Action:

#TrumpEndsShutdown #USIranStandoff #KevinWarshNominationBullOrBear #xAICryptoExpertRecruitment