90% of traders get the term "structure break" wrong
So here's a thread on how to identify a break of structure the RIGHT wayπ§΅π
(coming from a full-time market structure trader)
So here's a thread on how to identify a break of structure the RIGHT wayπ§΅π
(coming from a full-time market structure trader)
A structure break is simply when price breaks a pivot high/low
But there are a few rules that help determine if that break is a real BOS
Because the opposite of a BOS is a stop hunt
But there are a few rules that help determine if that break is a real BOS
Because the opposite of a BOS is a stop hunt
Let's first go over what a stop hunt is.
A stop hunt is when price takes out a pivot and immediately reverses.
Here's an example on $NQ
A stop hunt is when price takes out a pivot and immediately reverses.
Here's an example on $NQ
Stop hunts are typically wicks and result in a strong move in the opposite direction
A break of structure is simply the opposite
And can be comprised of 2 different rules:
A break of structure is simply the opposite
And can be comprised of 2 different rules:
1. Continuation
After price breaks a pivot, look for continuation in that direction
You'll also want to see price stay above the pivot line
Here's an example on $TSLA
After price breaks a pivot, look for continuation in that direction
You'll also want to see price stay above the pivot line
Here's an example on $TSLA
Continuation shows that there was a price imbalance and a trend has been established
It also shows the strength of that trend
As well as the opportunity for a supply/demand zone to form
It also shows the strength of that trend
As well as the opportunity for a supply/demand zone to form
2. A break of structure can also be established if there is enough time
Meaning if price breaks a high and spends TIME above that high (rather than instantly reversing)...
it shows that it wasn't a stop hunt
Meaning if price breaks a high and spends TIME above that high (rather than instantly reversing)...
it shows that it wasn't a stop hunt
Here's an example on $ES
Price didn't have continuation, but also never immediately reversed
It spent time chopping through the pivot line
Meaning there's real demand up at those levels
This is important because now there is a swing low that buyers should defend...
Price didn't have continuation, but also never immediately reversed
It spent time chopping through the pivot line
Meaning there's real demand up at those levels
This is important because now there is a swing low that buyers should defend...
in order for the trend to stay bullish
If price were to just stop hunt above the highs and reverse...
then trend may be bearish and you shouldn't be looking for bullish setups
One more mention about timeπ
If price were to just stop hunt above the highs and reverse...
then trend may be bearish and you shouldn't be looking for bullish setups
One more mention about timeπ
There is no specific amount of time needed for a BOS
It's relative to the timeframe you're looking at
The best way to understand time is just by studying charts
You'll start to see the difference between a BOS and a stop hunt
It's relative to the timeframe you're looking at
The best way to understand time is just by studying charts
You'll start to see the difference between a BOS and a stop hunt
This thread may have been confusing for some but to summarize...
1. Trend is all about higher highs/lows and lower highs/lows
2. A stop hunt isn't a real high/low
3. A BOS is a real high/low
1. Trend is all about higher highs/lows and lower highs/lows
2. A stop hunt isn't a real high/low
3. A BOS is a real high/low
If you learned something:
1. Follow me @FT__Trading for more of these
2. Like + RT the tweet below so others can learn!
3. Comment below other threads I should make
1. Follow me @FT__Trading for more of these
2. Like + RT the tweet below so others can learn!
3. Comment below other threads I should make
Loading suggestions...