ADVANCED

CRYPTOCURRENCY
TRADING
PEOEYE Academy Of Business Education
(Pvt) Ltd

SMART MONEY
CONCEPT
 MARKET STRUCTURE
WHAT IS MARKET STRUCTURE
Market structure, as a concept, is nothing new and has been around
for as long as financial markets themselves. However, the core
principles continue to be extremely important, especially when it
comes to analyzing price movement and identifying trading
opportunities. Market structure acts as a guide for understanding
upward, downward, and sideways trends. The same principles can
be used in any type of market, from stocks, futures, forex, and
commodities, to digital assets like cryptocurrencies or even physical
assets like real estate.
 WHY IS MARKET STRUCTURE
IMPORTANT IN TRADING.?
Market structure is important for both new and professional traders since it can influence the liquidity and
price action of a market. It's also one of the most commonly used techniques to understand trends,
identify potential reversal points, and get a feel for current market conditions.

Because market structure is a reflection of the two-way auction process and psychological changes of
market sentiment, it provides incredible insight into how the market is behaving. It can provide vital clues
about where the price action is heading next.

Market structure also helps to create efficient markets (asset prices reflect all available information).
Market makers are a big part of this and supply liquidity to ensure smooth transactions.
 TYPES OF MARKET STRUCTURE
Market structure can be broadly classified into three distinct categories.
MARKET STRUCTURE PHASE HH
REALLY PHASE
LH
DROP PHASE
HH

HH LH
HL
HL
HH LH
HL LL
BULLISH MARKET
HH LH
HL LL BEARISH MARKET
HH LH
HL LL
HH
HL LL

HL LL
 IMPULSE AND CORRECTION
When Market momentum is very strong to the upside or downside those types strong unhealthy price
action is called Impulsive Move, Price generally move in two way impulse and correction. you can
understand like this in impulsive move lots of institutional and Banks Buying Momentum and correction
phase retail traders trying to buy sell and market move in a particular range. Now I am going to explain you
here in details that how its looks.

IMPULSIVE MOVE

CORRECTIVE MOVE
EXAMPLES AND TRADE SETUPS USING
MARKET STRUCTURE
Market structure is not a trading strategy or specific setup. It's more of a high-level concept that allows
you to identify and understand overall market conditions. It can be used to help with trade entries or more
importantly, set invalidation levels and know when you're wrong. You can also manage trades and babysit
positions using market structure principles.
Pullback or Retracement: When the market is in an up or downtrend, this pattern indicates that the
price will push back and collect orders (producing a candle in the opposite direction) before continuing
the trend.
Structure Hold : This is essentially a return to a previous pullback, then the continuation of the
prevailing trend. It can result in trapped traders that expect the market to reverse but note how the
trend remains intact. No lower lows (in the bullish example) or higher highs (in the bearish example)
are created.

Continuation : This is a bullish or bearish structure where price forms a short consolidation or base
before pushing higher. During the base period, traders reaccumulate or redistribute their position
in anticipation of the next rally or drop. This can form a triangle or pennant pattern.
Bullish Market Structure / UP TREND
A bullish structure is defined by a series of higher highs (HH) and higher lows (HL).
The trend continues in the same direction until the asset price records a lower low (LL).

HH
HH
HL

HL
Bearish Market Structure / DOWN TREND
A bearish structure is defined by lower lows (LL) and lower highs (LH). The price trend
continues as long as lower highs (LH) are being printed and until a higher high (HH) is
created.

LH

LH
LL
LL
Sideways Market Structure
The horizontal movement of price shown by equal highs (EH) and equal lows (EL) is
called a sideways trend or sometimes referred to as chop.

EH EH

EL EL
 MARKET STRUCTURE WITH
CANDLESTICKS
Market structure can also be defined by candlesticks as
illustrated below

HH LH

LL
HL
Price Continuation
To confirm a trend it's important to see candlesticks close above the previous higher high
(in an uptrend) or below the previous lower low (in a downtrend).

This shows the continuation of buying as the price increases or the continuation of
selling as the price decreases.

Price Failure
If price action sweeps above the previous higher high but then closes below, this shows
weakness and could be the early sign of a reversal :
 HOW TO USE MARKET STRUCTURE
Market structure can help you define if-then scenarios. For example, if a structure break
occurs then look to get short on a pullback. HH

HH

HL
HL LL
 BRAKE OF STRUCTURE / BOS
BOS acts as trend continuation HH BOS

HH BOS

LH

LH
HL
Price again continues to
BOS break HH
LL HL
(Bullish Order Flow)
Price keeps on breaking
LL BOS
LL
(bearish Order flow)
L
 WHAT IS BREAK OF STRUCTURE
A sign of continuous order flow in the current trend direction
CORRECT BOS VS FAKE BOS
 WHAT IS A CHOCH
The first sign of a possible change in trend direction
 CHOCH VS BOS
The CHOCH is the FIRST sign of a possible trend reversal, and if followed up
with a BOS it offers a higher confirmation of a trend reversal
(opposed to the Choch by itself)
The Trend Is Your Friend
One of the most popular expressions in the trading world, and for good reason. If you
can use market structure to identify a trend, more often than not, the price will continue
in the same direction going forward.

Momentum
This is due to the simple fact that buyers (in a bullish trend) are already present. To
reverse the trend, aggressive sellers must enter the market. Significant volume is
required to not only put a stop to the current momentum but to then reverse the
direction.

Much like reversing the direction of a speeding car, energy is first required to bring the
car to a stop (breaking). Then, more energy is needed to start traveling in the opposite
direction (reversing).
 MARKET STRUCTURE FAQ
What's the Difference Between Market Structure and Trend?
Market structure is the behavior, condition, and current flow of the market. It highlights
support and resistance levels, swing highs, and swing lows. A trend is simply a consistent
direction of price movement over time. Market structure can tell you if the market is
trending or not.

What's the Difference Between Price Action and Market Structure?

Price action is the change of price over time. Market structure is about taking a step back
and organizing this price action into a set framework. For example, if the price action is
creating higher highs and higher lows, it's forming a bullish market structure.

How Do You Analyze the Market Structure?

The most basic form of analysis is to identify higher highs, higher lows, lower highs, and
lower lows. Within these four basic structures, you can identify further price patterns like
head and shoulders, double tops, triangles, flags, and pennants.
THANK YOU