The Ultimate Market Structure Guide (SMC & ICT)

Summary

In this video, the creator simplifies market structure by focusing on price action, highs, and lows. They emphasize the importance of understanding market bias and trading in alignment with higher timeframes. The video demonstrates common mistakes traders make, like trying to trade against the overall market trend and getting trapped by lower timeframe setups. The key takeaway is to follow the market's direction, scale in entries, and use confirmation from higher timeframes. The creator also offers guidance for those struggling with their trading, promoting a one-on-one coaching service for better results.

Takeaways

• 😀 Market structure can be simplified by focusing only on price action, specifically the highs and lows.
• 😀 It is important to identify the overall market bias (bullish or bearish) before trading.
• 😀 Avoid entering trades when price is near overextended areas, especially without confirmation of a break in structure.
• 😀 Recognizing manipulation is crucial—traders often get faked out when they enter too early.
• 😀 Always align your trades with the higher time frame trend to avoid being trapped by lower time frame moves.
• 😀 Lower time frame setups may look perfect, but if they go against the higher time frame bias, they are likely to fail.
• 😀 Trading against extreme points of interest (like major supply or demand zones) can lead to losses.
• 😀 Understanding the break of highs and lows on higher time frames is key to entering trades with strong setups.
• 😀 Liquidity can often be trapped at internal levels, waiting to be taken out before the market moves in the desired direction.
• 😀 Scaling into a position involves identifying new lows or highs and entering on confirmations in line with the higher time frame bias.
• 😀 Avoid overcomplicating market structure. Many traders try to make it seem more difficult than it really is, creating confusion to profit off new traders.

Q & A

What is the core concept of market structure discussed in the video?

The core concept discussed is that market structure is simply about price action, specifically identifying highs and lows. There is no need for complex advanced market structure courses, just focusing on these basic price action points.

Why is it important to identify the market bias before entering a trade?

Identifying the market bias helps you understand whether the market is overall bullish or bearish. It ensures you avoid making trades that go against the overall market direction, which increases the likelihood of a successful trade.

What mistake do traders often make when buying in a bullish market?

Traders often buy too early, thinking they are buying at the last low that broke structure. However, this is a mistake because they may not have seen a proper break of the recent high, and the market could pull back, stopping them out.

How does manipulation of price levels impact traders?

Price manipulation, such as faking out early buyers and taking out liquidity, can trap traders who enter too early. They get stopped out and might lose confidence, thinking they are bad traders, when in reality they were simply entering the market incorrectly.

What is the relationship between higher time frames and lower time frames in trading?

The video emphasizes that lower time frames should not contradict the higher time frames. If the higher time frame is showing a certain trend or direction, traders should align their trades with that direction, rather than getting caught up in misleading setups on lower time frames.

How can traders avoid getting trapped on lower time frames?

Traders can avoid getting trapped by consistently checking the higher time frame to confirm the overall bias. This will help them avoid entering trades that go against the market's primary direction, which is crucial for long-term success.

What does the concept of 'accumulation, manipulation, distribution' mean?

This refers to the three phases in market behavior: accumulation (building positions), manipulation (taking out liquidity), and distribution (selling or buying to take profits). A successful trade follows this cycle, with the final phase being distribution in the direction of the overall bias.

Why should traders be cautious when trading on the lower time frame?

Traders should be cautious because the lower time frame may present setups that seem perfect but go against the overall bias on the higher time frame. This can lead to false signals and losses if not aligned with the broader market direction.

What is the suggested approach if you miss the beginning of a move in the market?

If you miss the beginning of a move, you can scale in on lower time frames after confirming the bias on higher time frames. Look for confirmation entries that align with the overall market direction.

How does liquidity play a role in the market structure discussed?

Liquidity is crucial because the market often sweeps liquidity before moving in the intended direction. Identifying areas where liquidity is concentrated allows traders to understand potential price manipulation and better predict market movements.