Lesson 1: Basics of Market Structure

Market Structure is the most important concept in trading, and it will always be the first concept that I rely on when I'm analysing a chart.

Market structure shows you the overall order flow of the market and allows us to understand how and where price will move.

BULLISH MARKET STRUCTURE (UPTREND):

Buyers are in control of the market

Price will create higher highs (HH) and higher lows (HL)

Swing High is the highest point that caused the swing low

Swing Low is the lowest point that caused the swing high

When price breaks past the previous swing high in an uptrend, it creates a BOS (Break of Structure)

BEARISH MARKET STRUCTURE (DOWNTREND):

Sellers are in control of the market

Price will create lower highs (LH) and lower lows (LL)

When price breaks past the previous swing low in a downtrend, it creates a BOS (Break of Structure)

💡 Expect price to pull back after a BOS 

Swing Range is the area between the most recent swing high & swing low.

Internal Structure is everything contained between the swing high & swing low. (You will learn more about internal structure in the following lessons)

Strong highs/lows are formed when price breaks structure.

Weak highs/lows are formed when prices fail to break structure.

Strong lows and weak highs are created in a bullish market structure (uptrend)

Strong highs and weak lows are created in a bearish market structure (downtrend)

🎯 Our goal is to trade from strong structures & target weak structures. In this way, we will be able to follow the trend and smart money since smart money has an interest in protecting the strong highs/lows.