Break of Structure
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Market Structure Mapping Types
Although market structure is market structure, there are 3 different approaches that you
can use to map out and identify breaks of structure. This is important as it will give you
better insight of what price is likely to do next. The approach you take will ultimately
depend on how aggressive or conservative you would like to be with your trading.
Market Structure Mapping Types
Type 1 maps market structure using candle bodies and a break of structure is valid when
price breaks and closes above/below the previous candle body. This is noted as the most
conservative approach to mapping out market structure and identifying breaks of
structure.
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Type 2 maps market structure using candle wicks and a break of structure is valid when
price breaks and closes above/below the previous candle wick. This is the most common
approach to mapping out market structure and identifying breaks of structure as it is
effectively taking the average of type 1 and 3.
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Type 3 maps market structure using candle wicks and a break of structure is valid when
price breaks above/below the previous candle wick. This is noted as the most aggressive
approach to mapping out market structure and identifying breaks of structure. There can
be many false signals
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Market Structure Walk Through
Market Structure Type 1 maps market structure using candle bodies and a break of
structure is valid when price breaks and closes above/below the previous candle body.
This is noted as the most conservative approach to mapping out market structure and
identifying breaks of structure. Type 2 maps market structure using candle wicks and a
break of structure is valid when price breaks and closes above/below the previous candle
wick. This is the most common approach to mapping out market structure and identifying
breaks of structure as it is effectively taking the average of type 1 and 3. Type 3 maps
market structure using candle wicks and a break of structure is valid when price breaks
above/below the previous candle wick. This is noted as the most aggressive approach to
mapping out market structure and identifying breaks of structure. There can be many
false signals
BOS (Break Of Structure)
A bos is to initiate a Momentum Shift or a Continuation of Trend Structure. A bos of a
Swing high or Swing low is a BFI Initiation. HTF Highs and lows = Swing Structure LTF
Highs and lows within a range = Swing Structure Questions to self: ● What was the cau$e
that created the bos? ● Is this a noticeable break of a Swing Point? - Think BFI Initiation Speed/Aggression! ● Is this a Continuation of trend structure or a Momentum Shift after
a HTF mitigation?
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