Market Structure.
Market structure (MS) - the main tool in the analysis of the chart to determine the direction of the price one or the other side. Determination of the structure is based on the competent definition of minimums and maximums.
There are two basic types of structure:
An ascending structure is a movement in which lows and highs are rising, that is, each high and low is higher than the last.
As long as the price moves in a bullish structure, the priority for opening a position is to go long.
A descending structure is a movement in which the lows and highs are decreasing, that is, each new low and high is lower than the previous one.
As long as the price is moving in a downward structure, the priority for opening a position is to go short.
BOS. Breakdown of the market structure.
The structure can be formed for a certain period of time, but it will never last forever, sooner or later the moment of its breakdown will come because the goal of the movement has been fulfilled.
BOS - the breakdown of the market structure, a complete change of context.
Speaking of the example above, we could see the point in opening positions to go long, but after the market structure breaks down, the priority for opening a position becomes short.
cBOS. Confirmation of the market structure.
cBOS is a confirmation of the current structure in the market. The main difference from the "BOS" is that the structure does not change, but only continues to raise the lows and highs and we can successfully work within it, we do not have to always wait for the structure breaks, we can successfully work on the continuation of the current structure.
When we get a confirmation of the structure, it is the perfect time to wait for a pullback (correction) and continue working on the structure.
Examples:
