🏗ī¸Market Structure

See the Market Clearly: Automatic Market Structure Analysis

Ever feel like your chart is cluttered with noise, making it hard to spot the bigger picture? Smart Money Concepts cuts through the confusion with automatic market structure analysis. Here's what you get:

  • Clear Trend Identification: Our toolkit automatically draws the market structure right on your chart, revealing the overall trend and direction.

  • Reduced Chart Noise: Say goodbye to visual clutter! We filter out unnecessary information, making it easier to focus on what matters.

  • Informed Trading Decisions: With a clear understanding of market structure, you can make more confident and strategic trading choices.

Think of it like having a personal guide who highlights the important landmarks on your trading journey. Stop getting lost in the details and start seeing the market with clarity thanks to Smart Money Concepts.

Type Of Market Structure

Market structure is like a roadmap for traders, revealing the overall trend, its continuation, and potential reversals. The Smart Money Concepts toolkit simplifies this analysis by labeling key points on your chart:

  • BOS: Break of Structure - Often indicates the trend continuing in the same direction.

  • CHoCH: Change of Character - Usually signals a trend reversal, with price heading the opposite way.

  • X: Sweep - A temporary price movement that doesn't confirm a BOS.

Understanding the difference:

  • BOS vs. CHoCH: A BOS occurs when the price breaks through a key high/low in the same direction as the current trend, suggesting its continuation. A CHoCH breaks the opposite high/low, hinting at a potential reversal.

Sweeps: A closer look:

  • When the price briefly exceeds a previous high or low but fails to close above/below it, we call it a sweep or liquidity grab.

  • This means the current trend hasn't been confirmed, and the high/low is updated.

  • These sweeps can be valuable entry points for trades or indicate potential trend reversals.

Break Of Structure (BOS)

Market trends are like ocean currents, constantly shifting and guiding your trading journey. Smart Money Concepts helps you stay afloat by identifying Break of Structure (BOS) points, which often signal a continuation of the current trend.

Here's the breakdown:

  • BOS: This happens when the price breaks through a key high/low in the same direction as the current trend. Imagine a wave crashing past a previous high, hinting at the trend's strength.

  • Strong Trend Indicator: A BOS usually suggests the trend is still going strong, potentially leading to higher prices in an uptrend and lower prices in a downtrend.

  • Not Immediate: Remember, BOS isn't a magic spell. It's only plotted after a CHoCH (Change of Character), indicating a temporary pause or weakness before the trend resumes.

Think of it like this:

  • A CHoCH is like a small wave trying to change the current, but the BOS is the powerful wave that reaffirms the trend's direction.

Mastering the Market:

Understanding BOS and CHoCH empowers you to:

  • Ride the trend wave: Confidently enter and exit trades based on the trend's continuation signal.

  • Avoid false signals: Differentiate between temporary sweeps and true BOS confirmations.

  • Make informed decisions: Use BOS as one piece of your trading puzzle, combined with other analysis tools.

Change Of Character (CHoCH)

Spotting Trend Shifts: Change of Character (CHoCH) in Action

The market is like a chameleon, constantly changing its colors. Smart Money Concepts helps you identify these shifts with Change of Character (CHoCH), a technical pattern that signals a potential trend reversal.

Here's the gist:

  • CHoCH: This happens when the price breaks the opposite key high/low from the current trend and closes above/below it. Imagine a wave breaking in the opposite direction, hinting at a possible change in the current flow.

  • Trend Reversal Signal: A CHoCH suggests the current trend might be losing steam, and a new trend in the opposite direction could be brewing.

  • First Appearance: CHoCH is plotted the first time the price breaks the opposite key high/low, acting as an early warning sign of a potential shift.

Think of it like this:

  • The current trend is like a path, and CHoCH is a signpost pointing towards a possible detour or even a new road altogether.

Harnessing the Power of CHoCH:

By understanding CHoCH, you can:

  • Anticipate potential reversals: Adjust your trading strategies based on the possibility of a changing trend.

  • Exit trades strategically: Get out of positions that might be aligned with a fading trend.

  • Identify new entry points: Look for opportunities to enter trades that align with the potential new trend.

Remember:

CHoCH is just one piece of the puzzle. Combine it with other technical analysis tools and market context for more informed trading decisions.

Sweep (X)

Capturing Market Momentum: Unveiling the Power of "Sweeps"

Imagine the market as a bustling marketplace, filled with buyers and sellers constantly vying for the best price. A "sweep" in Smart Money Concepts is like a sudden surge of activity, where the price briefly breaks through a key high/low, but then retracts and closes outside that zone. This creates a unique opportunity for traders.

Here's the breakdown:

  • Sudden Spike: The price momentarily breaks through a key high/low, grabbing liquidity from unsuspecting traders.

  • False Breakout: But hold on! The price doesn't sustain the momentum, failing to close above/below the key region. This indicates a possible reversal in the trend.

  • Powerful Metric: Sweeps are exclusive to Smart Money Concepts and offer a powerful lens to identify strong trading setups.

Think of it like this:

  • Imagine a wave crashing against a rock, momentarily pushing past it, but then receding back. This "sweep" reveals the underlying strength of the rock (support/resistance) and suggests the wave might be losing its power.

Unlocking Trading Potential:

Understanding sweeps empowers you to:

  • Spot potential reversals: Identify early signs of a trend shift before it unfolds fully.

  • Refine entry points: Enter or exit trades with greater precision based on the sweep's direction and strength.

  • Boost trading confidence: Use sweeps as a valuable tool to confirm or refine your trading decisions.

Remember:

Sweeps are valuable, but not magic bullets. Combine them with other technical analysis and market context for optimal results.

Swing and Internal Structures

Smart Money Concepts Toolkit: Navigating Market Structure with Swing and Internal Views

The toolkit offers two distinct views of market structure: swing structure and internal structure. Each plays a crucial role in helping you understand price movement and identify potential trading opportunities.

Swing Structure:

  • Provides a broad overview of the market trend within a specified timeframe (e.g., 5000 bars).

  • Plots BOS (Break of Structure), CHoCH (Change of Character), and sweep points, highlighting significant trend shifts and liquidity areas.

  • Essentially, it depicts the big picture of the market's directional movement.

Internal Structure:

  • Comes into play when there's a significant gap between the BOS and CHoCH points within the swing structure.

  • Offers a more granular view of price action within this gap, enabling you to identify potential entry and exit points with greater precision.

  • Think of it as zooming in on a specific area within the swing structure to see the fine details.

Placement of Internal Structure:

  • When enabled, the internal structure is typically positioned at either the highest point or lowest point within the swing structure.

  • The exact placement depends on the specific market context and your trading strategy.

Imagine the swing structure as a map showing the major roads and landmarks of a city. The BOS and CHoCH represent key points on this map, but for navigating within a specific neighborhood, you need a more detailed map. This is where the internal structure acts as a zoomed-in map of the area within the gap, revealing smaller streets, alleys, and other relevant points of interest.

Here's how the internal structure helps in your described scenario:

  1. User Selects Starting Date: You mentioned that the user can select the date of the starting structure. This allows them to focus on a specific period within the larger gap identified by the swing structure.

  2. Internal Structure Overlay: Once selected, the internal structure is automatically plotted on the chart. This overlay provides a more granular view of price action within the chosen timeframe.

  3. Identifying Entry/Exit Points: The internal structure reveals smaller BOS, CHoCH, and sweeps within the gap, offering more precise locations for potential trades. Imagine it as identifying smaller intersections, hidden alleys, or landmarks within the chosen neighborhood on the zoomed-in map.

Remember, while the internal structure provides valuable details, it's crucial to consider it alongside the overall swing structure and other technical indicators for informed trading decisions.

The starting date of the internal structure must be placed at key points such as a key high, key low, and sweep points. If not done correctly the user risks drawing a bad structure

Is suggested to change the color of both the swing and the internal structure to avoid user confusion

Is suggested to limit the drawing of the swing structure to improve speed and avoid any possible memory errors

Mapping Structure

Unveiling the Market's Roadmap: Mapping Swing and Internal Points

The process of mapping a structured plot in Smart Money Concepts goes beyond simply identifying key highs and lows. It's about understanding the underlying price action and momentum that drive those points. Here's how it works:

1. Swing and Internal Points: The Building Blocks

  • Swing Points: These represent significant turning points in the market trend, often marking the boundaries of price swings (up or down).

  • Internal Points: These are additional points within a swing that provide more granular detail about price action within that specific movement. They are particularly valuable when the gap between a BOS and CHoCH is large.

2. Calculating and Identifying Key Points:

Our toolkit utilizes a sophisticated algorithm to analyze historical price data, identifying both swing and internal points. This calculation involves:

  • Volatility: Measuring price fluctuations to identify significant changes in momentum.

  • Support and Resistance: Recognizing areas where price tends to bounce back or stall.

3. Benefits for Traders:

  • Quick Identification of Key Levels: Traders can easily visualize potential support and resistance zones, pullback points, and highs/lows within a swing.

  • Charting Efficiency: Our automated analysis saves time and effort, allowing traders to focus on strategy development and decision-making.

  • Enhanced Market Understanding: By visualizing the underlying structure, traders can gain a deeper understanding of price movement and market dynamics.

Remember:

The structured plot is just one tool in a trader's arsenal. Combining it with other technical indicators and fundamental analysis is crucial for making informed trading decisions.

I hope this revised explanation clarifies the process of mapping a structured plot and its benefits for traders. Feel free to ask if you have any further questions!

The mapping structure will show the recent repainting zone as a red line.

Market Structure Alerts are available.

Algorithmic Logic

The Algorithmic logic has 2 different settings

The main difference between the 2 options comes to the type of trader you are:

Simplified Trading with Adjusted Points: A Beginner-Friendly Option

Looking for a simple and effective way to understand market movements? The Adjusted Point feature in Smart Money Concepts might be the perfect fit for you, especially if you're new to trading.

Here's why Adjusted Points are beginner-friendly:

  • No Internal Structure Hassle: Forget about the complexities of internal structure. Adjusted Points focus on the key turning points of the market, making it easier to identify potential entry and exit points.

  • Clearer Picture: Instead of analyzing multiple internal points, Adjusted Points provide a streamlined view of the market, reducing information overload for beginners.

  • Easy to Understand: The concept of Adjusted Points is straightforward, making it easier to grasp the underlying market dynamics.

  • Focus on the Basics: By eliminating the need for internal structure, Adjusted Points allow you to concentrate on learning the fundamental principles of trading before diving into advanced concepts.

Think of it like this:

  • Imagine navigating a city. Internal structure would be like exploring every street and alley, while Adjusted Points are like following major roads to reach your destination. Both get you there, but Adjusted Points offer a simpler and less overwhelming journey for beginners.

Remember:

While Adjusted Points are a great starting point, they shouldn't be the only tool in your trading toolbox. As you gain experience, you can explore other features like internal structure for a more in-depth analysis.

Dive Deeper with Extreme Points and Internal Structure: A Powerhouse for Advanced Traders

Ready to unlock advanced trading opportunities? The combination of Extreme Points and Internal Market Structure within Smart Money Concepts is a game-changer for experienced traders seeking high-confidence setups and major reversals.

Here's why this combination is perfect for you:

  • Granular Analysis: Internal Market Structure goes beyond the basic swing structure, revealing hidden details within large gaps between BOS and CHoCH. This allows you to identify precise entry and exit points with greater accuracy.

  • Extreme Accuracy: Extreme Points act as powerful filters, highlighting areas with strong potential for trend continuation or reversal. Combine them with Internal Structure for ultra-precise targeting of high-probability trades.

  • Confluence is Key: By using both Extreme Points and Internal Structure, you increase the level of confirmation for your trading signals, leading to more informed and confident decisions.

  • Master Market Dynamics: Delving into Internal Structure requires a deeper understanding of market mechanics. It's like having a secret weapon that unlocks the hidden language of price movements.

Think of it like this:

  • Imagine searching for diamonds. Internal Structure is like unearthing a promising minefield, while Extreme Points are like the tools that help you identify the most valuable gems within.

Remember:

Advanced tools like these demand mastery of the basics and a disciplined trading approach. Don't dive in without a solid understanding of market principles and risk management.

Premium and Discount Zone

Decoding Market Value with Discount and Premium Zones

Smart Money Concepts simplifies your trading by visualizing discount zones and premium zones, offering valuable insights into market sentiment and potential trading opportunities.

Imagine the market as a store:

  • Discount Zone: Think of it as a sale! Prices are lower than the perceived value, potentially indicating a buying opportunity for traders who believe the price will rise.

  • Premium Zone: Prices are higher than the perceived value, suggesting a possible selling opportunity if traders anticipate a price drop.

The 0.5 Fibonacci level acts as a neutral point separating these zones, helping you identify potential turning points in the market.

Trading with Zones:

  • Discount Zone: Look for long entries near the bottom of the zone, aiming to profit from a potential price increase. You can use the zone as support to confirm your entry or exit points.

  • Premium Zone: Seek short entries near the top of the zone, anticipating a price decline. The zone can act as resistance, helping you validate your trade decisions.

Remember:

  • These zones aren't foolproof, and price can break them. Use them in conjunction with other technical indicators and market analysis for more informed trading.

  • Consider volatility and market context when using these zones. A strong trend might break through zones more easily than a choppy market.

Unlocking Market Potential:

By understanding discount and premium zones, you can:

  • Identify potential trading opportunities: Look for entries aligned with the zone's buying or selling sentiment.

  • Refine your entry and exit points: Use the zone boundaries as support and resistance for confirmation.

Strong/Weak H&L

Unveiling Market Strength with Strong/Weak Highs and Lows

Trading is all about understanding market sentiment and predicting future price movements. Smart Money Concepts helps you do just that by unveiling Strong/Weak Highs and Lows, valuable indicators of mid-term price action.

Think of it like this:

  • Strong Highs act as ceilings, potentially preventing the price from going significantly higher.

  • Strong Lows act as floors, potentially stopping the price from falling much further.

Identifying Strength:

  • Relative Volume: Smart Money Concepts analyzes the volume associated with each swing point (High or Low). A higher relative volume suggests stronger buying or selling pressure, making the point more significant.

  • Holding Power: The tool then assesses if the price has respected the Strong High or Low since its formation. If the price hasn't breached it significantly, the point is considered stronger.

Trading Implications:

  • Strong Low: This indicates the price might be willing to continue going lower. Look for long entry opportunities near the Strong Low, potentially aiming to profit from a further price decline.

  • Strong High: This suggests the price might be facing resistance and struggling to go higher. Consider short entry opportunities near the Strong High, anticipating a potential price drop.

Remember:

  • Strong/Weak Highs and Lows are not guarantees of future price movement. Use them as part of your overall trading strategy, combined with other technical indicators and market analysis.

  • False breakouts can occur, where the price briefly breaks through a Strong High/Low but then retraces. Be mindful of such scenarios and manage your risk accordingly.

Unlocking Trading Potential:

By understanding Strong/Weak Highs and Lows, you can:

  • Identify potential trend continuations: Look for Strong Lows in downtrends and Strong Highs in uptrends for possible entry points aligned with the prevailing direction.

  • Refine your entry and exit points: Use these indicators as potential confirmation signals for your trades.

  • Gain insights into market sentiment: Strong/Weak points reflect buying and selling pressure, offering clues about potential future price movements.

Build-in alerts are available to the user

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