Market structure is the sequence of swing highs and lows. Get this right and trends become obvious.
Break of structure (BOS)
A candle closes beyond the last swing in the trend's direction: a new higher high in an uptrend. The trend continues.
Change of character (CHoCH)
The first break against the trend: in an uptrend, price closes below the last higher low. Buyers have lost control, at least for now.
Keeping it objective
- Use candle closes, not wicks.
- Pick one "structure timeframe" and stick to it.
- The swing that would prove you wrong is where your stop goes.
Wick says
BOS = "same story, next chapter". CHoCH = "plot twist!"
Key takeaways
- Uptrend = HH + HL; downtrend = LH + LL.
- BOS confirms continuation; CHoCH warns of reversal.
- Structure tells you where to put stops.