TREND IDENTIFICATION

• In Essence, the market is always Buying (Up) and Selling (Down). There is never stillness (except in closed markets or the
spread hours).
• The market is usually doing one of Two Things:
• The market can be Trending – Uptrend and Downtrend.
• The market can be Consolidating – Ranging, Choppy, Unclear.
• The NO Overcomplication Rule:
• The first thing you ask yourself in the morning: Is the market Up, Down or Sideways.

• The market moves in Cycles! Oscillating between its Mean Value and Fear/Greed.
 TRENDING MARKETS
UPTREND
• An Uptrend is defined as Market Structure that is Breaking the Highs and Maintaining the Lows.
• In simpler terms, a market that is making Higher Highs and Higher Lows.
• The Previous (last) High (HH) should always Break, while the Previous Low (HL) should not be broken.
TRENDING MARKETS
UPTREND
 TRENDING MARKETS
DOWNTREND
• A Downtrend is defined as Market Structure that is Breaking the Lows and Maintaining the Highs.
• In simpler terms, a market that is making Lower Lows and Lower Highs.
• The Previous (last) Low (LL) should always Break, while the Previous High (LH) should not be broken.
TRENDING MARKETS
DOWNTREND
TRENDING MARKETS
DOWNTREND
 CONSOLIDATING MARKETS
• A Consolidation is defined as Market Structure that is Failing to Break both the Highs and Lows (or just wicking them).
• Ranges/Consolidations are very important, because this is where BFIs are cooking, exchanging and agreeing on their orders and deciding
on the next move.
• Spot how before every big move, there is always a period of Consolidation, a huge Liquidity Grab and then the real move.
• Trading LTF Consolidations is very risky. However, a consolidation on 4H/D1, can be a trend on 15M, so that is tradeable.
CONSOLIDATING MARKETS
CONSOLIDATING MARKETS
CONSOLIDATING MARKETS
 DETAILS:

• Mark your Structural Points with the Highlighter Tool.

• Beware that a trend is fully established after 2 Highs/Lows are created.
• Always mark your SBs and trail back price to see where your LH/HL is. Mark it with a Line.
• Learn to ZOOM IN on your charts and spot all the details.
• Major/Swing structure is your main trend guidance. DO NOT confuse it with Minor/Sub-structure.
• Minor structure forms within the major one (to be explored later).
• Take note of Consolidations/Ranges. DO NOT trade them on lower timeframes than the 1H.

• Practice makes Perfect! Understanding STRUCTURE is your first goal as a trader. Everything else builds up on top of
it!
• A gap in your understanding of Market Structure will really hinder you from understanding the advanced concept.
• A mistake traders do is to jump on flashy SMC concepts, without having built the foundation.
 STRONG & WEAK HIGHS/LOWS

• A strong High is a High that has broken structure to the downside and has created a new confirmed LL. (basically, a LH)
• A strong Low is a Low that has broken structure to the upside and has created a new confirmed HH. (basically, a HL)

• A weak Low is a Low that hasn’t caused any break/shift in structure – simply a LL.
• A weak High is a High that hasn’t caused any break/shift in structure – simply a HH.

• We trade Against/Away from Strong structure Towards the Weak one.

• Simply, we buy from HLs and target the last HH. And sell from LHs and target the last LLs.
• A Strong structural point will Cause a break of previous structure, which makes it strong. Why?
• Because BFIs entered from there and they will likely Protect that High/Low.
• Hence why, we can also call the strong highs/lows – protected highs and lows. As BFIs will not allow for price to go above/below, as they
will go into Drawdown. (remember this is a theory! It’s not a fact that it’s like this)
STRONG & WEAK HIGHS/LOWS
STRONG & WEAK HIGHS/LOWS
FAILURE TO BREAK = LQ
STRONG & WEAK HIGHS/LOWS
 THE CONCEPT OF
STRONG & WEAK HIGHS/LOWS
 MAJOR & MINOR STRUCTURE

• The main determinant of Major and Minor structure are Timeframes!

• Remember, price is the same. Timeframes are just a different representation of price, providing either less or more details.
• Major/Swing /Confirmed/Strong structure is found on the HTFs.
• For me, HTF is 4H. For you, it could be Daily. For others, it could be 1H. The market is “fractal” (same patters, different TFs).
• Minor/Internal/Complex structure is found on the Middle Timeframes.
• For me, MTF is 15M. 4H 🡪 15M.
• Structure is literally everywhere. What makes a huge difference is knowing what to look for and on which timeframes.
• It’s important to understand the HTF Direction and Major Structures and then trade Minor Structure inside the Major Leg
(both counter and pro trend).
 WHAT IS COMPLEX
PULLBACK/CORRECTION?
• Complex pullback = Minor Structure! It is what forms within the Major Structure/Leg.
• We have Minor structure that forms with the trend – continuation trades with the HTF trend, as it is making the push.
• We have Minor structure that forms on the Pullback phase, after a new HH/LL is created and the market is pulling back for new HL/HH
– pullback/correction trades against the HTF trend. (those are more risky, lower probability and hard to trade).
MAJOR & MINOR STRUCTURE
MAJOR & MINOR STRUCTURE
MAJOR & MINOR STRUCTURE
EXERCISE
MAJOR & MINOR STRUCTURE
EXERCISE
MAJOR & MINOR STRUCTURE
EXERCISE
 TRADING RANGES
• The market is constantly moving in-between P/D (Premium & Discount) ranges.
• It goes from Expensive to Cheap and vice versa.
• Our aim is to know what is Cheap so we can Buy and what is Expensive so we can Sell. (buy low, sell high)
• Trading Ranges exist on every timeframe (from Monthly to 1M). It’s the Fractal Nature of the market.
• Our main Ranges are usually drawn on our HTFs. 4H ranges/Daily ranges.
• The same concept can be applied to 15M or any timeframe, in order to increase probability significantly!
• Remember: 4H ranges will always trump the 15M! D1 ranges will trump 4H. W1 >D1; M1 >W1, etc.
• Specific instruments DO NOT pullback often to Equilibrium. They are momentous, so they do around 30% pullbacks.
 PD RANGE
• In order to draw a Range, we will use the Fib Tool.
• All you need is 1, 0.5 and -1 stats on the Fib. Keep it Clear!!
PD RANGE
PD RANGE
MSS | TC | SB
 MSS FORMATION
• Market Structure Shift – This signifies a Failure to break above the Last HH/ LL and a shift of structure. Indicates first
signs of a potential reversal.
• Highest probability when it occurs at S&D zone.
• It is not a very high probability pattern, as the Major HL/LH might still be in-tact! Better wait for the major to break!
 MSS FORMATION
• MSS undesired outcome – Pay attention where the Major HL/LH!!
• The probability increases if the Major HL/LH also break after the MSS.
• The probability increases if you wait for this formation at HTF Zones.
MSS
MSS
MSS
 TREND CHANGE
• Trend Change (TC) – This signifies the first signs of a change of trend. (remember, it takes 2 HH/LL to confirm a trend)
• In an Uptrend, it is the break of the last Major HL (the one that broke structure).
• In a Downtrend, it is the break of the last Major LH (the one that broke structure).
• Body Close or Wick as a break? I personally use Wicks.You can use Body Closes above/below structure.
TREND CHANGE
 STRUCTURE BREAK
• Structure Break (SB) – It signifies a break of the last HH or LL. If there is SB, then structure is confirmed and becomes
strong.
• SBs appear in already Trending Markets or after the initial TC or MSS. They signify intention that the market will continue in the
direction it breaks through.
 DETAILS
• Start by Building a Story!
• When you open a blank chart, it’s all confusing. Take your time, analyze the Major Structure, mark it up, analyze the minor, etc.
• With time, your analysis can take you just 2 minutes.
• You will see TCs everywhere. Are they all equal? NOPE!
• We are only looking for TCs at S&D zones and potential HL/HH or HH/LL for counter-trend trades.
• The higher the timeframe, the stronger the TC.
• TC on each timeframe has a task. 4H – direction. 15M – minor structure. 1M – entry alignment.