1 How do we identify break of structure Basics

Summary

In this course, the instructor discusses a trading strategy developed over five years of experience. The focus is on understanding market structure, particularly through the concept of 'breaks of structure,' and applying this knowledge to speculate on market movements. The course emphasizes identifying higher highs and lower lows, understanding bullish and bearish trends, and practicing trade management techniques. The strategy encourages consistent practice to build a probabilistic view of the market and effectively trade in both bullish and bearish conditions, aiming to increase success in catching profitable trades.

Takeaways

• 😀 The course focuses on teaching a specific trading strategy developed over 5 years of experience, rather than just covering basic trading fundamentals.
• 😀 Understanding market structure, such as higher highs, lower highs, higher lows, and lower lows, is essential for analyzing price movement and making trading decisions.
• 😀 The key concept introduced is 'break of structure,' which refers to the lowest and highest points before new highs or lows are made, helping identify market direction.
• 😀 The strategy works by tracking market phases, such as higher highs and higher lows in an uptrend or lower highs and lower lows in a downtrend, to predict future price movement.
• 😀 Practicing and rewatching course material is emphasized. The more you review, the more likely you are to grasp complex concepts and improve trading skills.
• 😀 In a bullish market, you are primarily looking for buying opportunities, but you must ensure that the market structure continues to show higher highs and higher lows.
• 😀 Conversely, in a bearish market, the focus shifts to selling opportunities, as long as the market structure remains consistent with lower highs and lower lows.
• 😀 It's important to identify and stay within specific trading ranges. For example, a range between a higher high and a higher low signals a continued bullish bias.
• 😀 Practicing market structure concepts, such as identifying higher lows and lower highs, and determining whether you're in a bullish or bearish range, is essential for consistency in trading.
• 😀 Understanding and adapting to different timeframes is crucial. A market might show bullish trends on a smaller timeframe but bearish trends on a larger one, requiring careful analysis.

Q & A

What is the main goal of the 10x Academy's course?

The main goal of the course is to teach a specific trading strategy developed through 5 years of experience, focusing on in-depth concepts such as market structure, entry, risk management, and trade management. Unlike basic courses, this one dives deeper into the strategy rather than just covering fundamental concepts.

Why does the instructor emphasize breaking down the course into stages?

The instructor emphasizes breaking the course into stages to ensure that students fully understand each concept. The idea is to master the basics before moving on to more complex aspects, and to practice and rewatch lessons until the material is fully understood.

What is 'break of structure' in trading, according to the course?

'Break of structure' refers to the point when the price of an asset either creates a new high or low after a reversal. It indicates a shift in market dynamics, with higher lows and higher highs indicating an uptrend, and lower highs and lower lows indicating a downtrend.

How does the instructor define 'higher low' and 'higher high' in an uptrend?

In an uptrend, a 'higher low' is the lowest point price reaches before it breaks a previous high, and a 'higher high' is the highest point price reaches after breaking that previous high. This pattern of higher highs and higher lows characterizes an uptrend.

What should traders do when price is moving between a high and low in a bullish range?

When price is moving between a high and low in a bullish range, traders should primarily look for buying opportunities, as long as the price does not break below the low or exceed the high, which would indicate a shift in market structure.

What happens when a lower low and lower high are formed in a downtrend?

When a lower low and lower high are formed in a downtrend, it indicates a bearish market structure. In this scenario, traders should focus on looking for shorting opportunities, as the price is more likely to continue its downward movement.

What is the importance of understanding market structure in trading?

Understanding market structure is crucial because it helps traders identify whether the market is in an uptrend or downtrend, allowing them to make informed decisions about the direction of price movement and identify appropriate entry points.

Why does the instructor advise practicing examples multiple times?

The instructor advises practicing examples multiple times to solidify the understanding of market structure and the concepts of higher lows, higher highs, lower lows, and lower highs. Repetition helps reinforce the knowledge and make it easier to apply in real trading situations.

What is meant by the term 'range' in the context of market structure?

In the context of market structure, a 'range' refers to the space between the highest point (the high) and the lowest point (the low) in the market. It defines the current price movement within that range, which can help determine whether the market is bullish or bearish.

What does the instructor mean by the 'probabilistic view' of the market?

The 'probabilistic view' of the market means that trading involves estimating the likelihood of certain outcomes based on past price behavior. Since there are no guarantees in trading, traders aim to predict the most probable direction of price movement, rather than expecting a certainty.