▶️ How Does the Market Move?
At any given point in time, the market is likely to be moving in one of three directions: up, down, or sideways. Which direction is up? Which direction is down? And which way is sideways? When the market is moving up or down, it is said to be in a trend. When the market is moving sideways, it is typically in a period of consolidation. There are two types of trends that markets can be in: a bullish trend continuation trend or a bearish continuation trend.
▶️ Bullish Trend Continuation:
Buyers can control price action when the market is in a bullish trend. This market identified by price action that has started at an Initial Low and continued to rise up, achieving a New High when it breaks and closes above the previous high. As the market retraces, price action will continue to fail to break and close below the most recent structure lows. This will create a Higher Low. As the process repeats itself, we see a pattern of new highs and higher lows being created. This pattern reflects the changing dynamics of the market, and provides insight into the market's future movements. When price action is presenting this type of pattern, trend continuation traders should look for opportunities to buy in the market.
▶️ Bearish Trend Continuation:
A bearish trend continuation pattern indicates that the current downtrend is likely to continue. The sellers have taken control of the market and are looking to drive prices lower. This process is identified by price action starting at an initial high and then moving downward. This creates a new low as it breaks and closes below the previous structure lows when looking left. As the market pullbacks, price action fails to break and close above the most recent highs. This has created a Lower High. As the process repeats itself, we see a pattern of new levels being created, followed by decreases in the level of the old level. If you're a trend continuation trader, be on the lookout for selling opportunities in the market.
▶️ Consolidation:
When the market is in a period of consolidation, it is difficult to tell whether it is heading in a bearish or bullish direction. Instead, price action is “choppy” as there is no clear directional movement. During the period of consolidation, trend continuation traders should be careful when looking for trading opportunities.
▶️ Support and Resistance
After the formation of a New High, the market will retrace and create a higher low. When a movement occurs, the now-forming area of resistance is an indication that something important is happening. As price action pushes up from the newly created higher lows, that resistance level becomes the last line of defense for sellers to try and stop the buyers from rallying. Failure to break through the resistance level could indicate an uptrend period or reversal. If the price moves past the resistance level, this means that the trend is continuing. Remember the previous NH that turned into resistance after the retrace? Well, once this resistance level is broken, it becomes support. If price action retraces back down from our recent highs, this structure level should support the overall trend.
▶️ Forming Structure:
To create a valid new structure high or low, we need to watch for the market to break and close above/below the previous structure. When a trend is bullish, the market can create a "Higher High" near or above the highest point reached in the trend. When a trend is bearish, the market can create a "Lower Low" by trading near or below the lowest point reached in the trend. In order to have a valid Higher High, Higher Close, we need a candlestick that breaks and closes above the previous candles' all-time highs. It is only after we have generated a new structure that is highly formed that we can consider it to be a valid one. If you are looking for a bearish trend, simply use the opposite.
▶️ Why Is Structure Important?
Structure is important because it can help you predict where price action is likely to go. Previous support and resistance levels in the market act like a magnet, pulling price action towards them. When price action reaches high levels that have been hit multiple times in the past, it is considered to be a major structure level. It is important to pay attention to the main structural levels, because it is likely that the price action will be related to these levels.
Smaller ebbs and flows of a trend can be detected inside minor structure levels. These levels serve as both support and resistance, although they lack the strength of the primary structure levels indicated above.
At any given point in time, the market is likely to be moving in one of three directions: up, down, or sideways. Which direction is up? Which direction is down? And which way is sideways? When the market is moving up or down, it is said to be in a trend. When the market is moving sideways, it is typically in a period of consolidation. There are two types of trends that markets can be in: a bullish trend continuation trend or a bearish continuation trend.
▶️ Bullish Trend Continuation:
Buyers can control price action when the market is in a bullish trend. This market identified by price action that has started at an Initial Low and continued to rise up, achieving a New High when it breaks and closes above the previous high. As the market retraces, price action will continue to fail to break and close below the most recent structure lows. This will create a Higher Low. As the process repeats itself, we see a pattern of new highs and higher lows being created. This pattern reflects the changing dynamics of the market, and provides insight into the market's future movements. When price action is presenting this type of pattern, trend continuation traders should look for opportunities to buy in the market.
▶️ Bearish Trend Continuation:
A bearish trend continuation pattern indicates that the current downtrend is likely to continue. The sellers have taken control of the market and are looking to drive prices lower. This process is identified by price action starting at an initial high and then moving downward. This creates a new low as it breaks and closes below the previous structure lows when looking left. As the market pullbacks, price action fails to break and close above the most recent highs. This has created a Lower High. As the process repeats itself, we see a pattern of new levels being created, followed by decreases in the level of the old level. If you're a trend continuation trader, be on the lookout for selling opportunities in the market.
▶️ Consolidation:
When the market is in a period of consolidation, it is difficult to tell whether it is heading in a bearish or bullish direction. Instead, price action is “choppy” as there is no clear directional movement. During the period of consolidation, trend continuation traders should be careful when looking for trading opportunities.
▶️ Support and Resistance
After the formation of a New High, the market will retrace and create a higher low. When a movement occurs, the now-forming area of resistance is an indication that something important is happening. As price action pushes up from the newly created higher lows, that resistance level becomes the last line of defense for sellers to try and stop the buyers from rallying. Failure to break through the resistance level could indicate an uptrend period or reversal. If the price moves past the resistance level, this means that the trend is continuing. Remember the previous NH that turned into resistance after the retrace? Well, once this resistance level is broken, it becomes support. If price action retraces back down from our recent highs, this structure level should support the overall trend.
▶️ Forming Structure:
To create a valid new structure high or low, we need to watch for the market to break and close above/below the previous structure. When a trend is bullish, the market can create a "Higher High" near or above the highest point reached in the trend. When a trend is bearish, the market can create a "Lower Low" by trading near or below the lowest point reached in the trend. In order to have a valid Higher High, Higher Close, we need a candlestick that breaks and closes above the previous candles' all-time highs. It is only after we have generated a new structure that is highly formed that we can consider it to be a valid one. If you are looking for a bearish trend, simply use the opposite.
▶️ Why Is Structure Important?
Structure is important because it can help you predict where price action is likely to go. Previous support and resistance levels in the market act like a magnet, pulling price action towards them. When price action reaches high levels that have been hit multiple times in the past, it is considered to be a major structure level. It is important to pay attention to the main structural levels, because it is likely that the price action will be related to these levels.
Smaller ebbs and flows of a trend can be detected inside minor structure levels. These levels serve as both support and resistance, although they lack the strength of the primary structure levels indicated above.
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bit.ly/3spSQqC
🔻FREE Telegram channel🔻
t.me/DeGRAMChannel
🔻Contact for Paid SIGNALS🔻
t.me/DeGRAMForex