Market Architecture By 👑Royal Trend👑👑Royal Trend👑
In this video we try to understand the Market Architecture.
How market really work with number's
Difference between technical analysis and option trading
Technical analysis and options trading can go hand in hand. Many of the best practices for options trading come directly from technical analysis concepts. Technical analysis focuses on price. Fundamental analysis does not solely focus on price.
why we learn option chain?
Option chain is a chart that will give in-depth information related to all stock contracts available for Nifty stocks. The best thing about the option chain is that it provides valuable information about the current security value and how it will affect it in the long term.
What is the purpose of option chain?
It can be used in creating an option strategy at several strike prices. It can be used to analyse and draw noteworthy insights about the stock and its probable movements. It helps the traders in evaluating the liquidity and the depth of the option contract.
How important is option chain analysis?
The option chain analysis data provides a very comprehensive view for all the available options for any particular underlying asset. This helps in understanding and selecting the correct option for trading or investment purpose.
NOTE
#We Are Not Promote Anything
#This channel Purpose to share market ideas.
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Marketstructure
The Ultimate guide to Market structure with 30+ Charts! Hey everyone!👋
In this post, we'll delve deep into market structure, presenting insightful examples to enhance your understanding of this concept.
Introduction:
✅ Market structure is a framework for comprehending the movements and behaviour of markets. In layman's terms, it is a basic form of understanding how markets move.
✅ It can be seen as the flow of the price between a series of swing highs and swing lows.
✅ The market moves in trends, which are the result of various patterns and structures that form and evolve over time.
Exhibit: Various structures and patterns evolving over time into different trends
The market structure allows you to be in sync with the market and avoid counter-trend trading, which enhances the probability of your setups.
Exhibit: Market structure favouring longs
There are broadly 3 types of structures:
1. Bullish (Uptrend)
2. Bearish (Downtrend)
3. Ranging (Sideways)
Illustration: Bullish market structure
Illustration: Bearish market structure
Illustration: Range market structure
📈 What is an uptrend?
✅ Characterised by a bullish market structure.
✅ Formation of higher highs followed by higher lows.
✅ For an uptrend to stay intact, it must preserve its ascending structure - higher highs must follow higher lows.
📉 What is a downtrend?
✅ Characterised by a bearish market structure.
✅ Formation of lower highs followed by lower lows.
✅ For a downtrend to stay intact, it must preserve its descending structure - lower highs must follow lower lows.
✅ Lower highs are allowed if the price goes into compression or re-distribution.
⚡ What is a range?
✅ A range is a zone where the price finds itself bouncing between two levels.
✅ These levels are - range high and range low.
✅ The size of the range is dependent on different factors such as asset class, demand-supply, volatility, etc.
A lot of times, the structure won’t be as clear as you want it to be. Conversely, sometimes the structure will replicate the textbook. Hence, you need to be flexible in your approach.
Sometimes, trading in range-bound markets can be challenging due to the choppiness in price movements. However, when the price action is more defined, some traders may prefer to trade the range by executing breakout trades or mean reversion trades from the range high to the range low or vice versa.
It is better to combine market structure with other concepts/indicators for better results.
Exhibits: Bullish market structure
ATUL Industries
Tata Consultancy Services
Rain Industries
Indian Hotels
Navin Fluorine
Delta Corporation
Gujarat Gas
Page Industries
Titan Company
ITC
Exhibits: Bearish market structure
Birla Soft
Tech Mahindra
Indiabulls Housing
L&T Housing
Grasim Industries
Biocon
Tata Power
Canara Bank
NMDC
Bharat Petrol
Exhibits: Ranging market structure
Granules
ITC
Syngene
Hindustan Copper
Thank you for taking the time to read this. I hope you found it to be informative and useful.
Much love, ❤
Rajat Kumar Singh (@johntradingwick)
Community Manager (India), TradingView
Trend Identification: Utilizing Higher Highs and Higher LowsTechnical Indicator - William Fractal
Setting - 20 period
About the Indicator : William Fractal is a technical analysis tool used by traders in financial markets to identify potential turning points and trends. It is based on the concept of fractals, which are self-similar patterns that repeat themselves on different scales. The William Fractal is formed when there is a series of five bars, with the middle bar having the highest high and the lowest low in comparison to the surrounding bars. Traders use this pattern to determine potential buy and sell signals, as a fractal forming at the bottom of a downtrend could signal a potential reversal, while a fractal forming at the top of an uptrend could signal a potential trend continuation. The William Fractal can be used in combination with other technical indicators to improve trading decisions.
Benefits of using William fractal indicator
Easy to Identify : The William Fractal is a simple and straightforward pattern to spot, making it accessible for traders of all skill levels.
High Accuracy : The pattern is based on the concept of fractals, which have a high degree of accuracy in identifying trend reversals.
Confirms Trend Strength : By highlighting areas of potential trend reversal or continuation, the William Fractal can help traders confirm the strength of a trend.
Improves Timing : By using the William Fractal in conjunction with other technical indicators, traders can improve the timing of their trades and increase the chances of success.
Identifies Key Turning Points : The William Fractal can help traders identify key turning points in the market, allowing them to make informed trades and take advantage of market movements.
Works in All Markets : The William Fractal is applicable across different financial markets, including stocks, forex, and commodities, making it a versatile tool for traders
Try this out and let me know your thoughts in the comment section.
Introduction to market structureHey everyone!👋
In this article, we'll dive into market structure, providing insightful examples to enhance your understanding of this concept.
Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading!
Market structure is a basic form of understanding how markets move. It can be seen as the flow of the price between a series of swing highs and swing lows.
The market moves in trends. These trends are nothing but a combination of different structures.
The market structure allows you to be in sync with the market and avoid counter-trend trading, which enhances the probability of your setups.
There are broadly 3 types of structures:
1. Bullish (Uptrend)
2. Bearish (Downtrend)
3. Ranging (Sideways)
Illustration: Bullish market structure
Illustration: Bearish market structure
Illustration: Range market structure
📈 What is an uptrend?
✅ Characterised by a bullish market structure.
✅ Formation of higher highs followed by higher lows.
✅ For an uptrend to stay intact, it must preserve its ascending structure - higher highs must follow higher lows.
✅ Lower highs are allowed if the price goes into compression or re-accumulation.
📉 What is a downtrend?
✅ Characterised by a bearish market structure.
✅ Formation of lower highs followed by lower lows.
✅ For a downtrend to stay intact, it must preserve its descending structure - lower highs must follow lower lows.
✅ Lower highs are allowed if the price goes into compression or re-distribution.
⚡ What is a range?
✅ A range is a zone where the price finds itself bouncing between two levels.
✅ These levels are - range high and range low.
✅ The size of the range is dependent on different factors such as asset class, demand-supply, volatility, etc.
A lot of times, the structure won’t be as clear as you want it to be. Conversely, sometimes the structure will replicate the textbook. Hence, you need to be flexible in your approach.
Sometimes, trading in range-bound markets can be challenging due to the choppiness in price movements. However, when the price action is more defined, some traders may prefer to trade the range by executing breakout trades or mean reversion trades from the range high to the range low or vice versa.
It is better to combine market structure with other concepts/indicators for better results.
Thanks for reading! As we mentioned before, this isn't trading advice, but rather information about a tool that many traders use. Hope this was helpful!
See you all next week. 🙂
– Team TradingView
Feel free to check us out on Instagram , and YouTube for more awesome content! 💘
Beginners Guide to Market StructureMarket Structure is the most fundamental aspect of analysing charts, mastering it goes a long way in increasing one's reading of price. It provides us with a narrative with which to look at price. At a glance market structure looks quite simple but when studied in depth it has many nuances & can provide with very valuable information. Market structure is fractal in nature which means that the same pattern of price making higher highs & lower lows or vice versa repeats on all time frames. A bullish market structure on a higher time frame can have a bearish market structure on a lower time frame in its retracement leg. To analyse market structure a Top Down approach is used in which we start out by marking the structure on a higher time frame & then move down to lower time frames repeating the same process till we know where price is presently.
Market Phases - Every trader must knowMarket Phases -Stock prices may appear random, but there are repeating price cycles, which are predominantly driven by the market participation. Below are the four types of market phases that occur.
Phase 1: Accumulation - The accumulation phase is a stage of consolidation. There is no clear trend, and the stock is usually trading in a range. It's a span of time in which traders and institutions are slowly accumulating shares, but the market has not broke out yet. Trend traders finds difficulty to trade.
Phase 2: Advancing - During the advancing phase, price breaks out of range (comes out of the accumulation phase) and begins a sustained uptrend. This stage is when the price begins moving up. The big money has established a position and retail investors are now invited to join in the profit party. This is the most profitable time to own the stock – an opportunity to let your profits run.
Phase 3: Distribution - The distribution phase begins as the advancing phase ends and price enters another range period. The shares are being sold over a period of time—the opposite of accumulation. This time, the sellers want to maintain higher prices until the shares are sold.
Phase 4: Declining - During the declining phase, price breaks out of the range (comes out of the distribution phase) and begins downtrend. This stage comes after distribution when price begins moving down.
Now lets understand them one by one in detail :-
1.)Accumulation phase where trend traders find difficulty to trade
Accumulation usually occurs after a fall in prices and looks like a consolidation period.
Characteristics of accumulation phase:
It usually occurs when prices have fallen over the last 6 months or more
It can last anywhere from months to even years
It looks like a long period of consolidation during a downtrend
Price is contained within a range as bulls & bears are in equilibrium
The ratio of up days to down days are pretty much equal
The 200-day moving average tends to flatten out after a price decline
Price tends to whip back and forth around the 200-day moving average
Volatility tends to be low due to the lack of interest
Examples of Accumulation -
How To Trade Accumulation ??
1.)Sell At Resistance
2.)Buy At Support
Do not go blindly short at resistance, wait for any reversal candle or look for any negative price action in smaller TF. Look for reversal candles
Never buy blindly on support. Look for reversal candles. Switch to smaller Time-frame find a bullish price action/ bullish chart patterns.
Never Ever Trade At Midpoint In A Range Market. You never no where it will head, to the the support area or to the resistance area.
2.)Advancing phase which trend traders love — Best trading strategy is to long the uptrend
After price breaks out of the accumulation phase, it goes into an advancing phase (an uptrend) and consists of higher highs and lows.
Characteristics of advancing phase:
It usually occurs after price breaks out of accumulation phase
It can last anywhere from months to even years
Price forms a series of higher highs and higher lows
Price is trading higher over time
There are more up days than down days
Short term moving averages are above long-term moving averages (e.g. 50 above 200-day ma)
The 200-day moving average is pointing higher
Price is above the 200-day moving average
Volatility tends to be high at the late stage of advancing phase due to strong interest
Examples of Advancing
How To Trade Advancing ??
1.)Breakout Trading - Where you above the highs
2.)Pullback Trading - Where you buy support which was earlier a resistance. This is called change in polarity.
Avoid Trading against the trend. If you trade then take small profits. You will get max with the trend.
3.)Distribution phase- - Distribution usually occurs after a rise in prices and looks like a consolidation period.
Characteristics of distribution phase:
It usually occurs when prices have risen over the last 6 months or more
It can last anywhere from months to even years
It looks like a long period of consolidation during an uptrend
Price is contained within a range as bulls & bears are in equilibrium
The ratio of up days to down days are pretty much equal
The 200-day moving average tends to flatten out after a price decline
Price tends to whip back and forth around the 200-day moving average
Volatility tends to be high because it has captured the attention of most traders
Examples of Distribution :-
How To Trade Distribution ??
1.)Sell On Resistance
2.)Buy On Support
Do not go blindly short at resistance, wait for any reversal candle or look for any negative price action in smaller TF. Look for reversal candles
Never buy blindly on support. Look for reversal candles. Switch to smaller Time-frame find a bullish price action/ bullish chart patterns.
Never Ever Trade At Midpoint In A Range Market. You never no where it will head, to the the support area or to the resistance are.
4.Declining phase - Best trading strategy is to short the downtrend
After price breaks down of the distribution phase, it goes into a declining phase (a downtrend) and consists of lower highs and lows.
This is the stage where traders who do not cut their loss become long-term investors.
Characteristics of declining phase:
It usually occurs after price breaks out of distribution phase
It can last anywhere from months to even years
Price forms a series of lower highs and lower lows
Price is trading lower over time
There are more down days than up days
Short term moving averages are below long-term moving averages (e.g. 50 below 200-day ma)
The 200-day moving average is pointing lower
Price is below the 200-day moving average
Volatility tends to be high due to panic and fear in the markets
Examples of declining :-
How To Trade Declining ??
1.)Breakdown Trading - Where you sell below the lows
2.)Pullback Trading - Where you sell on rise after a breakdown. Supports turned into resistance. This is called change in polarity.
Avoid Trading against the trend. If you trade then take small profits. You will get max with the trend.
Hope you all learnt from this post. Share with the community if you liked it.
Regards
Omahto
The Types of Market Days - Ultimate guide to trading daysHi, today we are going to see one of the most important concepts for day trading. I have taken all the content from the book “Secrets of a Pivot Boss” and added illustrations and charts, so that you don’t have to read the book. I am merely a presenter of the original content written by Franklin Ochoa. But the charts and illustrations are all done by me (If you want to download the PDF version of this post, you can checkout the links below the post).
There are six types of market days that we will cover. These types of days are repeatedly seen in the market, but no two days are ever identical. As such, these categories should be used more as guidelines, rather than seeing them as etched in stone. Again, your ability to recognize the pattern of the day accurately will be a huge step toward successfully engaging the market
1. Trend Day
Exhibit:
• The Trend Day is the most aggressive type of market day.
• On a bullish Trend Day, the open usually marks the day's low, while the close usually marks the day's high, with a few ticks of tolerance in either direction.
• On a bearish Trend Day, the open will usually mark the day's high, while the market will usually close near the session's low.
• The market will typically start fast on this type of day and the farther price moves away from value, the more participants will enter the market, creating sustained price movement on increased volume.
• Initiative buying or selling is the culprit on this type of market day, as these participants are confident they can move price to a new area of established value.
• Price conviction is strongest during a Trend Day. Market will start strong right out of the gate and will usually maintain a unidirectional stance throughout the day, never calling into question the day's direction or conviction.
• This type of day has the highest price range (high price minus low price), meaning it can be quite costly if you are positioned against the market or if you fail to recognize the pattern early enough to enter alongside the market.
• These types of days only occur a few times a month, but catching these moves can certainly make your month, in terms of profits.
• The Trend Day is usually preceded by a quiet day of market activity, which is usually a day with a small range of movement. Coincidentally, this type of market behaviour will usually follow a Trend Day as well.
2. Double-Distribution Trend Day
Exhibit:
• While this day is a trending day, it in no way has the confidence or conviction of a Trend Day.
• Instead, this type of day is characterized by its indecisive nature at the outset of the session.
• During this type of day, the market will usually open the session in a quiet manner, trading within a fairly tight range for the first hour or two of the session, thereby creating an initial balance that is narrow.
• The initial balance is traditionally defined as the price range of the first hour of the day.
• If the initial balance is too narrow, price will break free from the range and auction toward new value, creating range extension, which is any movement outside the initial balance.
• After the initial balance of the Double-Distribution Trend Day has been defined, price will break out from the range and auction toward new value, where it will form a second distribution of price. This is the market's attempt at confirming whether new value has indeed been established.
• Double-Distribution Trend Day opens the session quietly, trading within a tight range that can be viewed as the day's "warm up" period. Eventually, price breaks free of the range and begins trending toward new value, igniting initiative buying or selling.
• Once the market finds new value, it then builds out another range before ending the day.
• The ranges formed at both the beginning and end of the day is where the term "double-distribution" comes from, as the bulk of the day's volume resides at one of these extremes, essentially forming a double distribution of trading activity.
• The initial balance is the base for any day's trading and is extremely important to the Double-Distribution Trend Day.
• A narrow initial balance is easily broken, while a wide initial balance is harder to break. The fact that the initial balance is narrow on this type of day indicates that there is a good possibility of a breakout from the
initial range, indicating that you will likely see a move toward new value.
• The narrow initial balance at the beginning of the Double-Distribution Trend Day indicates that either buyers or sellers will eventually overwhelm one side or the other.
• Once direction is decided, price will freely move toward a new area of value since it is being driven by initiative market participants.
3. Typical Day
Exhibit:
• The Typical Day is characterized by a wide initial balance that is established at the outset of the day.
• On this type of day, price rallies or drops sharply to begin the session and moves far enough away from value to entice responsive participants to enter the market.
• The responsive players push price back in the opposite direction, essentially establishing the day's trading extremes. The market then trades quietly within the day's extremes the remainder of the session.
• The opening rally or sell-off is usually sparked by reactions to economic news that hits the market early in the day. This opening push creates a wide initial balance, which means the day's "base" is wide and will likely go unbroken.
• A wide base during the first hour of the market will likely mean that the day's extremes will also remain intact, or unbroken.
• During this type of day, you will usually see price trade back and forth within the boundaries of the opening range, as fair trade is easily being facilitated.
4. Expanded Typical Day
Exhibit:
• Similar to the Typical Day in that it usually begins the session with early directional conviction. However, price movement at the open is not as strong as that seen during a Typical Day.
• The initial balance is wider than that of a Double-Distribution Trend Day, but not as wide as that of the Typical Day. Hence, it is susceptible to a violation later in the session.
• Eventually, one of the day's extremes is violated and price movement is seen in the direction of the break, which is usually caused by initiative buying or selling behaviour.
• During an Expanded Typical Day, both the upper and lower boundaries of the initial balance are susceptible to violations. On any given day, you will see one, or both, of the boundaries violated, as buyers and sellers attempt to push price toward their own perceived levels of value.
5. Trading Range Day
Exhibit:
• Both the buyers and sellers are actively auctioning price back and forth within the day's range, which is usually established by the day's initial balance.
• On this day, the initial balance is about as wide as that of a Typical Day, but instead of quietly trading within these two extremes throughout the day, buyers and sellers are actively pushing price back and forth.
• This type of day is basically like a game of tennis. The players stand on opposite sides of the court and take turns volleying the ball to one another throughout the match.
• Likewise, buyers and sellers will stand at the extremes of the day and will enter the market in a responsive manner when price reaches the outer limits of the day's range.
• Responsive sellers will enter shorts at the top of the range, which essentially pushes price back toward the day's lows, while responsive buyers will enter longs at the bottom of the range, which pushes price back toward the day's highs.
• This type of market day offers easy facilitation of trade and gives traders amazing opportunities to time their entries.
6. Sideways Day
Exhibit:
• On this type of day, price is stagnant, as both buyers and sellers refrain from trading. This type of session usually occurs ahead of the release of a major economic report or news event, or in advance of a trading holiday.
• There is no trade facilitation and no directional conviction.
• The initial balance is rather narrow, which at first indicates the potential for a Double-Distribution Trend Day. However, the initiative buying or selling required for a Double-Distribution Trend Day never enters the fray, which leaves the market terribly quiet the rest of the session.
• The Trading Range Day and the Sideways Day sound similar, but the difference lies within the participation levels of both buyers and sellers.
So, with this, we are done with all types of the trading days. Remember, each of these types of days is not set in stone. While every market day is similar to a day from the past, similar does not mean "exactly." You must be able to snuff out the subtleties of each new day as it relates to a day from the past. Steadfast practice creates valuable experience.
I spend a lot of time creating these educational posts, illustrations, charts, and PDFs. Please be appreciative of that and leave a like and comment if you found these helpful. It will help to know that people are reading these posts. Also, if you need a PDF of this post with all the charts and illustrations, check out the links below this post.
Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Happy learning. Cheers!
Rajat Kumar Singh (@johntradingwick)
Bearish market structure - Illustrations + Structure typesThis is the third post on market structure. Do check out the previous 2 posts if you haven't already.
Recap
Market structure is simple and a basic form of understanding, how the markets move. The Price Action is how the market moves based just on price, without the consideration of trends and how they may continue. But the market structure is focused mainly on the trend. The market structure is formed using swing highs and swing lows. You may have already heard about the formation of higher highs and higher lows in a bullish trend or the formation of lower highs and lower lows in a bearish trend. This is what is called as market structure.
What is a Bearish market structure?
A bearish market structure is a structure that constitutes of formation of a series of lower highs and lower lows. In simple words, when the price is making lower lows and lower highs, it is said to be forming a bearish market structure.
Illustration: Bearish market structure
What is the use of identifying a Bearish market structure?
Identifying any market structure plays a crucial role in entry and exit. In the case of a bearish market structure, the previous lows are often seen as resistance zones where new shorts can be entered with an expectation of lower price movement. When the price returns to or near the previous low, it is often seen as a selling opportunity, commonly known as “selling the rip”.
Exhibit: Pullback in a Bearish market structure
If a stock is moving in a bearish trend but the price prints a new higher high, the trader must become cautious because a trend change may be underway or it may just consolidate before resuming the original trend or it may very well be a bull trap. If a trend change is confirmed, the trader may exit the shorts and look for the trades on the long side.
So, after the formation of a new high, there are only 3 scenarios that can arise.
1. Trend reversal
2. Consolidation and continuation
3. Bull trap
Exhibit 1: Creation of a new high
Chart example:
Exhibit 2: Trend reversal
Chart example:
Exhibit 3: Consolidation and Continuation
Exhibit 4: Bull Trap
These are the only structure that can form in a bearish trend and they will occur time and again. Hence, all these concepts are valid on all time frames.
This is all you need to know about a bearish market structure. Now, open any random chart and back test the concepts. The more you practice, the better you will become. Whatever strategy you use, understanding the structure will always make you more confident in your trades.
I spend a lot of time creating these educational posts, illustrations, charts, and PDFs. Please be appreciative of that and leave a like and comment if you found these helpful. It will help to know that people are reading these posts.
Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Happy learning. Cheers!
Rajat Kumar Singh (@johntradingwick)
Bullish market structure - Illustrations + ChartsRecap
Market structure is simple and a basic form of understanding, how the markets move. The Price Action is how the market moves based just on price, without the consideration of trends and how they may continue. But the market structure is focused mainly on the trend. The market structure is formed using swing highs and swing lows. You may have already heard about the formation of higher highs and higher lows in a bullish trend or the formation of lower highs and lower lows in a bearish trend. This is what is called as market structure.
What is a Bullish market structure?
Like I said above, a bullish market structure is a structure that constitutes of formation of a series of higher highs and higher lows. In simple words, when the price is making new highs and higher lows, it is said to be forming a bullish market structure.
Exhibit: Bullish market structure
What is the use of identifying a Bullish market structure?
Identifying any market structure plays a crucial role in entry and exit. In the case of a bullish market structure, the previous highs are often seen as support zones where an entry can be made with an expectation of higher price movement. When the price returns to or near the previous high, it is often seen as a buying opportunity, commonly known as buying the dip”.
Exhibit: Pullback in a bullish market structure
Similarly, as soon as the price breaks the previous low and creates a new low, the trader must become cautious because a trend change may be underway or it may just consolidate before resuming the original trend or it may very well be a bear trap. If a trend change is confirmed, the trader may exit longs and look for the trades on the short sides.
So, after the formation of a new low, there are only 3 scenarios that can arise.
1. Trend reversal
2. Consolidation and continuation
3. Bear trap
Exhibit 1: Creation of a new low
Exhibit 2: Trend reversal
Exhibit 3: Consolidation and Continuation
Exhibit 4: Bear Trap
These are the only structure that can form in a bullish trend and they will occur time and again. Hence, all these concepts are valid on all time frames.
This is all you need to know about a bullish market structure. Now, open any random chart and back test the concepts. The more you practice, the better you will become. Whatever strategy you use, understanding the structure will always make you more confident in your trades.
I spend a lot of time creating these educational posts, illustrations, charts, and PDFs. Please be appreciative of that and leave a like and comment if you found these helpful. It will help me to know that people are reading these posts. Also, if anyone is interested in getting a PDF version of this thread, then you can check the links under this post.
Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Happy learning. Cheers!
Rajat Kumar Singh (@johntradingwick)
Introduction to market structre Market structure is one of the most undervalued topics in trading. People don't spend enough time learning about it. In this thread, I'll try to touch on all the important aspects of market structure.
Introduction
Market structure is simple and a basic form of understanding, how the markets move. The Price Action is how the market moves based just on price, without the consideration of trends and how they may continue. But the market structure is focused mainly on the trend. The market structure is formed using swing highs and swing lows.
You may have already heard about the formation of higher highs and higher lows in a bullish trend or the formation of lower highs and lower lows in a bearish trend. This is what is called as market structure.
How to draw and find market structure?
Finding a market structure is an easy task. All you have to do is connect the recent swing highs and swing lows and identify how the price is moving.
If the price is forming a series of higher highs and higher lows, then it is a Bullish market structure. Similarly, if the price is forming lower highs and lower lows, it is a bearish market structure. I’ll post separate threads on various market structures at a later point in time.
Types of market trend
The market trend in 3 different directions at any given time and understanding when a shift occurs based on the timeframe you watch is pivotal to successful trading. The 3 types of market trends are:
1. Bull trend
2. Bear trend
3. Sideways trend
Type of market structure
There are 5 types of market structures.
1. Bullish market structure
2. Bearish market structure
3. Ranging/sideways market structure
4. Change of trend from bullish to bearish
5. Change of trend from bearish to bullish
Exhibit 1: Bullish market structure
Exhibit 2: Bearish market structure
Exhibit 3: Ranging/sideways market structure
Don’t worry I’ll cover all these topics in separate threads. This was just an introductory thread on market structure.
Read the post a few times and you will be able to understand everything. If anyone is interested in getting a PDF version of this thread, then you can check the links under this post.
Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Rajat Kumar Singh (@johntradingwick)
NSE Certified Technical & Fundamental Analyst
Happy learning. Cheers!
TCS EDUCATIONAL CHART COMBINING MARKET SRTUCTURE & ACCUMULATIONtoday we'll discuss about market structure and accumulation range bound market
the price started a bearish trend by making lower highs
then the price sustained to go any lower
the market then came in range bound structure
and with breakout we saw huge volumes
now for the future analysis-
=== the strength of impulse waves is declining so we might see some consolidation/distribution phase
SORRY FOR THE VOICE _/\_
if u have any doubts feel free to ask in comments section