[00:02] cannot read the chart properly. You see price moving, but you do not actually know whether the market is bullish, bearish, or simply pulling back. So, as a result, you end up buying into weakness, selling into strength, or
[00:19] getting chopped up in the middle. But, my friend, once you understand market structure, the charts start telling a much clearer story. Literally, right before I sat down to record this episode for the Market Mechanics
[00:34] Mentorship Series, I just closed a trade making me about 399.4K going to walk you through over the next 30 days. And you will realize that the
[00:47] foundation of all of these Market Mechanics concepts is within market structure. I'm going to break down market structure at a fifth-grade level so that you can start reading the market with more clarity, more confidence, and
[01:02] with more clarity, more confidence, and a whole lot less confusion. Welcome to episode three of the Market Mechanics Mentorship Series. Now, it's time to learn one of the most important foundations in trading, and that is
[01:17] Because before you can think about entries and exits, stop losses and take profits, liquidity concepts, supply and demand zones, you first need to know
[01:29] what the market is actually doing. So, like I promised, I'm going to break it all down at a fifth-grade level so that you can absorb everything and apply everything with ease and confidence. So, this is, to me, the order of
[01:45] importance in terms of Market Mechanics. Market Mechanics comprises of liquidity concepts, institutional concepts, institutional zones, order flow, market structure, a lot of these different concepts, but
[02:00] what lies at the foundation is market structure. So, I really can't emphasize the importance of market structure. It's so god damn important. You just got to learn it and not only must you learn it, you must master it.
[02:14] Because every other concept is built on top of market structure. So, please spend a lot more time in this lesson really digesting the concepts, synthesizing the information, [snorts] applying the concept, applying the
[02:27] principles over and over again until you get it, until you can read market structure with ease, until it feels like second nature to just identify structure and just determine the trend direction.
[02:42] and some slides that I've prepared for you guys, right? So, you can expect some good old entertainment. Okay? So, first of all, going to go through theory first, right? I'm going to go through the theory using
[02:57] all of these chart diagrams that I've prepared for you guys. Just going the theory before we go on to the charts and apply everything, right? Later on, I'm going to map out structure and show you my entire top top process in terms
[03:10] of how I determine the trend direction, how do I actually map out market structure from top to bottom. But for now, just go through the basics. Even if you already know the basics, it's important for you to like just revise
[03:23] the basics. So, what is market structure? Market structure is the way price forms highs and lows over time. Basically, what it does is that it helps us understand the direction,
[03:37] who's in control of price, and whether the market is continuing or shifting, right? Whether it's actually going up or reversing. At the simplest level, market structure is simply the pattern of highs and lows
[03:54] that price tends to leave behind when it moves. And those highs and lows will tell you whether the buyers are in control or the sellers are in control or neither side has
[04:06] any control whatsoever. Remember like what I mentioned in the previous lesson, at any given moment, the market can only move in three ways. the market can only move in three ways. It can either go up, down, or sideways.
[04:20] That's it. And in the uptrend, price is going to be creating your higher highs and higher lows, right? Where this high is higher than the previous high and this low is higher than the previous low, which signal to us that the buyers
[04:33] are in control. So, if we want to trade with this uptrend, we want to look for longs. And ideally, we want to look for longs at these lows right here. Now, you got your downtrend, which is price creating lower highs and lower
[04:49] lows. Once again, we call that because this low is lower than the previous low. This high is lower than the previous high. Not rocket science, guys, which means that sellers are in control of price. So, ideally, I should
[05:02] be looking to short. And then last but not least, we got the period of uncertainty where neither buyers or nor sellers are in control of price. So, as a result, there is no clear trend direction and the market is
[05:15] just moving sideways just like this. This tell us that both the buyers and the sellers are fighting for control. They are playing the tug-of-war where neither side seems to be winning. But eventually, as we know, using the
[05:30] concept of imbalance and balance, using the concept of order flow, eventually, imbalance and it break out of this consolidation either to the upside or to the downside.
[05:42] the downside. That's just the nature of price. given moment, price can only do one of these three things. It cannot move in circle, it cannot move zigzag, all right? So, yeah. Just just keep things
[05:56] Now, this is the expectation versus reality, okay? So, this is what textbook show you how market structure looks like, right? Higher highs, higher lows, lower highs, lower lows. But in reality, the market
[06:11] looks something just like this, where there's a lot more structural highs and lows that is being created on the lower time frames, that is being created in the internal structure. So, it's important for you to understand
[06:25] the core principles of market structure, so this way you are never ever lost in live market conditions. Because you cannot expect this sort of price action to be present in real market condition. That's just fantasy.
[06:39] Because this is what the market tends to do, right? But like I said, if you just apply the same principles, which means in a bullish market structure, price is creating higher highs and higher lows, then you'll be fine, right? You will
[06:52] still be able to identify structure properly. So, using this example right here, let me map that up. So, price went up, creates a pullback, and then goes up there, holding a higher low right here,
[07:04] and then it continues higher, right? So, over here, this is like a minor pullback, right? But price continue going up even higher, right? So, this is high, and then this is where price starts pulling back again, and now this
[07:18] becomes the new high, which is much more higher than the previous high, and then to the upside again, giving us a new low. of internal structure, where we talk about all of these tiny little peaks
[07:31] that is going on right here later on. But for now, just keep things simple, and just know that as long as you implement the principles that we are going to be teaching here, you will not be lost.
[07:45] So, yeah. And that's how break of structure is formed, right? The break of structure happens when price take out the last structural high in a uptrend and when it takes out the last structural low in a downtrend just like
[08:00] Okay, so that's what I can see. When price take out the last high, we got a break of structure. When price take out the last high, we got a break of structure. And then same thing in a downtrend price comes down and take out
[08:13] the low, we got a break of structure. When price take out the low, break of structure. And you want to expect a pullback after a break of structure because like I mentioned, the market has to move from
[08:26] phases of imbalance to balance to imbalance to balance. And applying that same concept right here, after a imbalance move to the upside where we just got a break of structure, we are expecting price to pull back and just
[08:39] balance itself out. So, as a result, it's going to start to lose steam and starts pulling back. So, this is a rule that I want you guys to remember, right? It's a fundamental principle on how price actually move.
[08:52] After a break of structure, you want to expect that price is going to start retracing or pulling back. This way, you are never entering way too of beginners, they tend to enter right here when the market has already made
[09:06] its move. And that's really because you don't understand this. Because if you that, "Okay, I shouldn't enter for a buy right here. I should just wait for price to pull back, wait for the pullback to be over, then I look for longs and trade
[09:20] the continuation of the move itself." bearish market structure looks like. Let's talk about swing highs and swing lows. How do you actually identify valid swing highs and swing lows?
[09:37] So, in an uptrend, your swing high is basically the highest point that led to the swing low. That caused the pullback to start. The swing low is the lowest point that creates the break of structure and lead
[09:52] to the swing high. Okay, so using this example right here, we can obviously price see that price is in an uptrend. And if that's the case, is creating higher highs and higher lows.
[10:05] where is the swing high and where's the swing low then? point that led to the swing low. So, quite simply put, is the highest point that price has reached before it starts pulling back.
[10:21] Before it starts retracing, that becomes our swing high. So, this is a swing a swing high. Because, once again, that's the highest high that price have reached before it starts pulling back. It's the peak of the mountain.
[10:36] is the lowest point that creates the break of structure and led to the swing Okay, so in this case, is this the swing low? No. Is this the swing low? No. Is this the swing low? No. Is this the swing low? No. Why? Because it's not the
[10:51] lowest point that created the break of structure and led to the swing high. The keyword here is the lowest. So, that's a mechanical rule that you can actually swing low. Swing high is the highest point that led to the pullback to start,
[11:07] right? It's usually situated at the start of the pullback itself. And then, swing low is the lowest point before the continuation of the move itself. Right? So, when you're looking at a break of structure just like this, you can
[11:22] immediately identify your swing high as the highest high, you know, that caused the start of the pullback, and the swing low as the lowest point that caused price to break structure. Okay, so it's not going to be this low.
[11:36] It's not going to be this low because this low is higher than this low. And this low is higher than this low. Sorry, so in this case by definition, this right here would be the lowest low and that's the swing low.
[11:48] As simple as that. So once again, it's very important for you guys to have like this sort of mechanical rules in your trading system so that there's no room trading system so that there's no room for guesswork or emotions whatsoever.
[12:00] In a bearish structure, same thing but you flip it upside down. Swing low is high. Swing high is the highest point that creates the break of structure and lead to the swing low.
[12:14] this is the lowest point that caused price to start pulling back to create the new lower high. led to a break of structure to the downside and just continuing this
[12:30] If that's the case, we can identify the swing high by trying to find the highest point that price has reached before it actually broke structure. high? No, it's not. Is this the highest
[12:45] high? No, it's not. This is the highest high. So as a result, this becomes my low. And then I'm not able to identify my swing low until price starts pulling back.
[12:59] just like this we can identify our new swing low. And then we cannot identify the swing high until price breaks structure. Right, so over here when price is doing this, I cannot identify my swing high
[13:14] yet. So this is still my previous swing high. So that stays exactly as where it is because price has not given us a break of structure yet. Until eventually price comes down, breaks structure taking out this low right here. Now,
[13:29] this becomes the new swing high because this is the highest high that creates the most recent break of structure and led to the swing low. Okay? So, that's just how the market structure
[13:43] that's just how the market structure actually works. Just to really drive that point home, you just want to make sure that you are sticking to these principles itself, right? So, in [snorts] this case, price
[13:56] goes up, pulls back, goes up, pulls back again, goes up, pulls back again, and then goes up. So, in this case, this is the break of structure. And once again, applying the same
[14:09] point that led to the break of structure. It's not going to be this low, it's not going to be this low, it's going to be this low right here. Okay? And then my swing high will be the highest point that led to the swing low,
[14:22] right here since this is when price actually starts pulling back. So, this becomes my swing range, and this is the area that I want to focus I don't want to I don't care about what price is doing outside of this swing
[14:36] Because this is what price is doing right now in the present moment. So, I right here or here or here. I only care about what price is doing within the swing high and the swing low itself. And all of that will change once price
[14:51] give us a new break of structure. You can see later on price gave us a new break of structure. Guess what? Now we reapply the same principles and we identify that this becomes the swing high, but the swing low is no longer at
[15:04] this point right here. Yes, been moved to this area right here. The most recent swing low is the most recent lowest point that led to the break of structure. So, this becomes the swing high, and this becomes the swing low,
[15:19] and this becomes the new swing range. Same principle right here on a downtrend, right? Swing high, swing low after break of structure, this remains as the swing low, and then this becomes the new swing
[15:33] Now, internal structure is everything contained between your swing high and your swing lows. Here's what I basically mean by that. After you identify your swing range,
[15:48] internal structure, which is why the first step is to always identify your swing range. And you do that by determining who is in control of price through mapping out of the market structure.
[16:03] Through mapping out your break of structure. If you see that we got a price is creating higher highs and higher lows, obviously we are in an If price has created a break of structure to the downside, lower highs
[16:16] and lower lows, we are in a downtrend. And identify that so that we can define our swing range, which is the area in which we want to focus our attention on. In this case, this is the swing range,
[16:30] And this means that everything in between, all the structural pullbacks, retracements that you see within this swing range, is just internal structure. Okay, so once again, stick to the definition. Internal structure is
[16:45] highs and your swing lows. So in this case, price goes up, pulls back, goes up, pulls back, and then goes up. So if you look at this, this is price creating higher highs and higher lows, just like what we have seen on the
[16:59] But is this a swing low? Not really. Is this a swing low? Not really, because we low is right here. Okay, so that doesn't change whatsoever. So as a result, we can identify this thing that is going on in here as the
[17:15] internal structure. So this becomes the internal break of structure to the upside. Internal break of structure to the upside. And using and applying the same principles, the lowest low that led to the internal
[17:28] internal low. And then the highest point that led to the internal low, this becomes your internal high right here. So, internal high, internal low, and this becomes our internal range.
[17:42] This area right here. Okay? So, everything in between the structure. And the only way you can identify your internal structure is if you have
[17:55] identified your swing structure and your swing range. So, just to drive home this concept itself, I've given you another example here. Once again, I think it's very important
[18:09] concept because if you don't understand such a basic concept, later when you go into the charts and you try to map out structure, it's going to be extremely structure, it's going to be extremely overwhelming and confusing.
[18:23] Ah. God damn. So, swing structure, this is up, pulls back, goes up, pulls back, and then goes up just like this. Textbook swing structure, we already know that the buyers are in control of price.
[18:36] But let's zoom into this section right here. Okay? So, let's say this is on the frame. If you zoom in to the lower time frame, you look at price using a microscope, this is where
[18:49] you're able to see that this entire move that looks very nice and smooth actually looks like this on the lower time frame. Actually looks like this under the microscope. So, this leg right here
[19:03] represents this leg over here, okay? So, I want you guys to look at this side by side. So, swing low and swing high has been This is the swing low, this is the swing high, so this is the swing range. Which
[19:18] the swing range right here is your internal range. So, all of this is actually your internal range. Okay, all of this right here is your internal range, all of this is your
[19:30] internal structure. So, the internal highs and lows are demarcated by these red dots. All right, so swing high, swing low. Zoom in, this is the swing high, swing low, no change. Everything
[19:44] in between internal structure. So, price goes down, pulls back, goes down, pulls goes down, pulls back, goes down, pulls back, goes down. Now, this is the back, goes down. Now, this is the hallmark of a bearish trend direction.
[19:57] lows. This tell us that price is actually bearish right now on the internal structure. Why did price shift to bearish? Well, price shifted bearish to facilitate the swing pullback.
[20:12] What I just mentioned? I mentioned that after a break of structure, you're expecting, anticipating price to start pulling back. structure, price is going to start pulling back, which means that it's not
[20:25] shifting bearish so that the entire trend can reverse. It's just shifting bearish in the short term to facilitate the retracement. So, as a result, price is creating lower highs, lower lows right here. So, you
[20:37] structure to downside. Same right here, same right here. And then eventually same right here. And then eventually price shifted bullish, and right now going to touch on late a little bit, where signal to us that there's a
[20:50] reversal in price, and this tell us that the buyers has take back control of price, the buyers has overwhelmed the sellers, demand has exceeded supply, and highs and higher lows on the internal structure again.
[21:05] Okay, so continuing this move causing this break of structure on a swing structure, which is what you see right here. So, this tells you that the internal structure has to shift first before the
[21:18] swing structure actually shift. All right, so the internal structure All right, so the internal structure must shift from bearish to bullish first before the swing structure can shift back bullish.
[21:31] That's what fractal means, right? Basically, price happens on a higher time frame must first happen on the lower time frame itself. And you will see the same exact patterns across every single time
[21:46] same concepts of mechanical market structure, the same principles, you can structure, the same principles, you can come to the exact same conclusion.
[21:58] to trade with the prevailing trend direction, because that determines the institutional flow of money. So, if price is giving us a bullish market institutions are looking for longs, and we want to trade with them rather than
[22:12] against them. Same thing, price is giving us a bearish market structure, we want to look for shorts. So, in this case in a bullish market structure, you want to trade from strong structure and target weak structure.
[22:26] So, I want to look for longs at all of these strong lows, and I want to target these weak highs. Now, the reason why we call them weak is because this is where the record structure happened. And the reason we call them strong is because
[22:40] this is where price is most likely going to hold the next time price comes back to that area right here. Right, to maintain this bullish trend direction. lows, we want to enter for longs at these strong lows and target these weak
[22:55] highs right here. Same thing in a downtrend, we want to sell at the strong highs and target these weak lows over here.
[23:08] which tell us that there's a shift in structure, which tell us that there's a change in trend direction. So, in this case, price comes down, pulls back, and then goes down. Okay, we
[23:21] got a lower high, lower low, break of structure over here. structure over here. And right now, our expectation is that if price were to continue bearish, come up here, pull back, create like a new
[23:34] and then comes down and take out the weak low, right? Continue this strong weak low, right? Continue this strong lower high and weak lower low dynamic, which tell us that the sellers are in control of price.
[23:47] what we have seen is that the buyers actually took back control of the market. How can we tell? We can tell when price actually went up there and take out the strong high, the strong lower high.
[24:02] So, breaking the cycle of the bearish downtrend. And bear in mind that it takes a lot a lot a lot of money for price to break a strong structure, right? Like, in order for price to come
[24:15] strong high, it requires a lot of capital. Only institutions have the right? Only a lot of liquidity and trading volume has the power to do that. So, in this case, this just tell us that the buyers has
[24:30] overwhelmed the sellers, demand have exceeded supply, and the trend direction has now shift up from bearish to bullish. Okay, and then later on, price create a new higher high and higher low, which
[24:44] tell us that right now price is in the in a uptrend. Okay, so when this high is stronger than the previous high, bullish structure. This low, So, higher than the previous low, bullish
[24:57] structure. Okay, so yeah, this is where we know that price is going to maintain bullish and then eventually this bullish trend direction runs out again. Price comes down, take out the last low, the last strong low giving us another market
[25:10] shift which prove to us that right now the trend has officially shifted from bullish to bearish and the whole cycle repeats itself over and over again as the market actively seek fair value.
[25:25] So, that's what market shift is about, right? Market shift basically tells you that the trend direction has changed. It signals a reversal, a shift in
[25:37] structure. And it pretty much tell us that the buyers has took back control of the price or the sellers has took back control of the price itself. So, this concept allow us to know when
[25:50] So, this concept allow us to know when price is actually reversing. the theory, right? All the you have went through all the chart diagrams and you have kind of established the principles that define swing and internal structure
[26:03] and a reversal, it's time to go on to the charts and apply everything that we just learned. So, with that being said, let's go on to TradingView. So, when you open a blank chart just like this, you want to ask
[26:15] like just really determine the market direction. Is the market trending up, down, or sideways? Where are the obvious swing highs and swing lows? Is price making
[26:29] higher highs and higher lows or lower highs and lower lows? Is this move a pullback or a reversal? Who is in control of price right now? So, just by applying the same mechanical
[26:42] principles that I just taught you, using the exact same systematic approach of, you know, swing low is here, swing high is here, break of structure is here, you should be able to come to a conclusion on like whether the buyers or the
[26:55] sellers are in control of price. So, what I'm going to do now is that I'm going to show you some examples. I'm going to do one using the chart that we have on the left-hand side right here. And then later I'm going to do a bar
[27:07] replay and show you using like this live market condition right here. So, let's go through the first example, right? So, let's look at a chart just like this. just like this is that you want to just go and identify the most obvious break
[27:22] of structure. That's it. If you see price is like, you know, just going I'm just like this, go and find out where is the most obvious break of structure, the most significant break of structure. So, in this case, price went up, make a
[27:35] massive pullback, and then goes up, right? So, I can clearly see that this right here is my bullish swing break of structure. just like this. This also tell me that this is the
[27:50] lowest point that led to the bullish break of structure. It's not this low, because this is the lowest point, and this becomes my swing low, right? And it's a strong low, right? Because we're actually in the uptrend right here. And
[28:04] then the swing high can only be identified once price actually starts pulling back, right? So, in this case, once price starts pulling back right caused the pullback to start to happen, and this becomes my
[28:17] weak low. So, my expectation right now, looking at this bullish swing structure, is that I'm expecting price to, you know, potentially pull back, create like a new higher low right here, and then continue
[28:30] going up, take out the previous weak low, and just continue this bullish And this also tell us that if price comes down here and take out our strong low, this signal to us that the market has reversed from bullish to bearish.
[28:46] The sellers has actually took back control of price. Okay, so that's always the first step is to just identify the most obvious break of structure so that you can define your swing structure.
[28:59] structure and you can clearly see that we are actually in a bullish trend direction right here, what you can do to go one step further is to define your internal structure. And like I said, internal structure is
[29:13] basically everything that's in between your swing structure. little bit right now since we don't need it anymore. So the internal structure requires you to like just
[29:25] look at what price is doing within the swing range. So, let me just use like a purple highlighter to map out the the swing low and swing high in this example here. This is the swing
[29:37] high, right? Because that was the highest point that caused price to start making this massive pullback. And then this is the new swing low and then this becomes the new swing high that we have up here. All right, so this
[29:50] low, swing high. here is your internal structure, right? So if I'm zooming in here, right, the price action over here, what do I see? I saw that price has actually shifted
[30:04] bearish, right? To actually facilitate the pullback right here. So, this is just price turning bearish in the short term to retrace to fair value so that we can have more
[30:17] buyers to step into the market for price to continue going up. Okay? Just like remaining at this exact same time frame, I can clearly map out my internal structure, right? You can see just by looking at the candlesticks,
[30:30] you can see price goes up, pulls back, goes up, pulls back again, goes up, pulls back, creating all of your lower highs and lower lows and lower highs and lower lows. Right? So this is where you can also map
[30:43] out your internal break of structure. Right? So, in in this case, I can see keep things simple and go and map out the most obvious one. Right? So, this is the most obvious internal break of structure right here. And then there's
[30:56] another one right here. Very obvious, right? Price pull back, come down, take out the low, and just continue bearish. So, in this case, becomes the swing internal high and internal
[31:11] low. Let me map that up for you guys with the highlighter tool again. Right here. Okay, so let me just map that up in like the red color just to show you guys this is the internal high, internal low,
[31:24] internal high, internal low. And this tell us that this is the most recent internal high. This is the most recent internal low until price starts pulling back. Once price starts pulling back, then I can pretty much define this
[31:39] right here as my new internal low, and my internal high remains there until that high gets taken out. Until we get a break of structure. So, in this case, forget about all of these move that has
[31:53] happened right here. If we were in this exact moment, right? Where these candlesticks was like down here, my expectation will probably be, okay, price is just going to continue creating lower highs and lower lows, just
[32:05] continuing this downtrend. And if price actually go up there and take out this high, this internal high, guess what we have? We got your market shift, which is a change in the trend direction.
[32:20] And it's indicated with a shift in structure, where price take out a strong structure and cause the entire direction to reverse, to change.
[32:32] So, in this case, internal high, internal low. Later on, demand over exited supply, buyers overwhelm the sellers. As a result, there was so much buy orders right here, so much buying volume
[32:45] causing price to rise significantly and taking out this last internal strong high. Internal strong lower high. Causing the market to shift bullish and this tell us that this pullback is over. And the short-term direction, short-term
[33:01] And the short-term direction, short-term trend direction has changed from bearish to bullish again. And right now, this tell us that okay, cool. Internal structure is bullish and the swing structure is also bullish.
[33:13] Everything is aligned and now is the perfect time to look for longs. through all the multi-time frame concepts and when to look for longs, when to look for shorts in the next few lessons. But for now, like I said, don't
[33:26] worry about entries, don't worry about exits. Just focus on mastering market structure. Just focus on reading price. So, let's continue to map out the internal structure. So, over here, we got a market shift, so I can map that up
[33:39] market shift right there. And then after the market shift happened, let's try to determine where is the new internal high. So, this is the internal low and just
[33:51] nice, if you look at the internal low, it's aligned with the swing low as well. internal low can be at the exact same price point as a swing that does happen. Price went up
[34:04] and it starts pulling back. So, now, this is the highest point that caused price to start pulling back. So, this becomes our new internal high. And then, where can we find our new internal low? Well, we try to identify
[34:17] where's the next break of structure on the internal structure. So, in this case, price went up, pulls back, goes up there, take out the internal high. Now, we got an internal break of structure. Now, we can identify the new internal
[34:30] Okay, and the new internal high is pretty much the lowest price point that And in this case, it's going to be this low right here. Okay, so now this becomes the new internal range,
[34:44] this internal high and this internal low. focus on. And then eventually, you can see the market start shifting bullish on a swing structure when price actually come up
[34:58] there and take out the swing high that we have on the left-hand side. And when this, we know for a fact that price is going to just continue going up until it creates a new high. And we also know that at some point of time, it's going
[35:13] to start pulling back. So, we should anticipate pullback to happen anytime soon after the break of structure happen. So, right here, this is where price starts
[35:29] starts pulling back. Now, at this point of time, I want you to like just ask yourself, is this move a pullback or a reversal? How do we know whether it's just a pullback for price to, you know,
[35:43] retrace, pause, catch a breather before continuing going up? Or whether it's actually like a real reversal where the trend direction is the swing structure is going to change from bullish to bearish and right now
[35:58] collapse what he has done right here. How do we know? Well, we don't. We don't know until price actually break structure. Okay? So, a pullback is a temporary move
[36:14] the swing structure, against the higher time frame trend direction. And the reason why the pullback occurs is because it needs to find fair value so continue going up. A reversal is when the market actually
[36:30] shift direction. It's when the market actually shift from bullish to bearish. And a reversal only happen when there is Remember just now what we talked about the market shift?
[36:43] Right? The market shift indicates to us that the market is reversing. And in this case right here, where is the market shift going to occur, then that tells that the entire trend is reversing.
[36:56] direction, and this is the strong low. in order for the trend to shift from bullish to bearish, price needs to come us the market shift. So, in this case, if price starts, you
[37:12] know, starts going down just like this, this doesn't necessarily mean that price is actually reversing. It could simply means that price is pulling back to the right here for price to continue bullish.
[37:26] But, if price were to continue bearish, keep on coming down, and it comes down keep on coming down, and it comes down and take out the 4-hour swing low that strong low that we have on the left-hand side right here, this could be the first
[37:40] sign that tell us that the market is officially shifting bearish because we just got a market shift. So, that's where we know for a fact The reason why I want to briefly cover this is because a lot of beginners, they
[37:55] tend to get trapped because they think that every pullback is a reversal. When in reality, it's just a pause in price before it can continue going up or down. So,
[38:10] pullback versus reversals. Right, so in this case, Another thing I want to point out is that the internal structure starts shifting before the the structure starts shifting. So, in this particular
[38:23] example, we know that price actually came down to got this 4-hour swing low right here, right? Giving us a market shift. But before this market shift happened, we actually got a internal market shift
[38:35] Because if you look at the internal structure, once again, by definition, lows and the swing highs, you will see that we actually got a market shift right here. All right, so let's once again take things one step
[38:48] further, right? Let's not get ahead of ourselves. Let's just go back to this internal break of structure, and then later on, price went up there, then goes up, right? That's what the price action is showing me. So, as a
[39:03] result, I can map this up as my new internal break of structure right here. Which means that I can also identify my new internal high
[39:15] and internal low. Right, so in this case, you can either mark this as your internal high or this one right here. mechanical rule, I'm just going to mark the internal high right here, and then
[39:28] this is where if I want to refine it, this becomes my internal break of structure right here. So, if price comes down and take out this low right here, this will tell us that
[39:41] the internal structure is shifting from bullish to bearish. And that could be is going to start pulling back. It's not going to reverse yet because price has take out the internal low, which tell us that the pullback is potentially going
[39:56] So, in this case, price comes down, right? Later on, comes down and take out the internal low, giving us the internal market shift. So, this becomes internal market shift. Let me just put a I beside it to make
[40:10] Right, so this is the internal market shift. And you can see, the internal structure shifted bearish first before the swing structure actually shifted Once again, this is what I mean when I said that price is fractal. Whatever
[40:25] happens on a higher time frame must first happen on the lower time frame. first happen on the lower time frame. As above, so below. As below, so above. structures that are shifting bearish, right? So, once again, map out all of
[40:39] here. And here, and you can identify your internal lows right here.
[40:52] lowest point, and then later on, price came down and give you us a market shift. Okay, so hopefully by now you guys should have a very clear understanding of how to define your swing structure
[41:04] and your internal structure. If not, let me just quickly give you guys another example where we can maybe map out the charts live, right? So, let's go back to here. Okay, so over here, this is where the market structure has officially
[41:18] shifted bearish, right? And the internal structure is also bearish. So, once again, draw your internal range. So, in this case, this was the last internal right? So, I'm just going to map that right here.
[41:31] And then, this is the new internal low, right? But, we actually got an internal break of structure to the downside right here. So, let me erase that, put that right here, internal break of structure. So, this means that the internal high is
[41:46] no longer at this point right here. It's been moved to this new internal high is the highest point that led to the internal break of structure. So, now then, where's the internal low? Internal low is the lowest low
[42:02] that caused price to start pulling back. So, in this case, it's going to be this low right here. Okay, so that becomes the internal low. And now, ladies and gentlemen, this becomes the internal range where we are
[42:15] focusing on. So, once again, our expectation right continue bearish, right? Price is going to come up here, pull back to this high, and just continue going down. Now, this is another example
[42:30] beginners have. Does this count as a break of structure? You can see the candlestick wick they clearly took out the last high. In order for a break of structure to happen, the candlestick body must close
[42:46] low. Write this down somewhere. You must get the candlestick body close, right? So, in this case, price came down, pulls And notice what price does when price approaches this low.
[43:01] candlestick here. The candlestick body closed below the previous low, right? It closed right When in this case, the candlestick body did not close above
[43:15] the previous high. You can see all of this is just candlestick bodies closing candlestick wick they did break out the high, but it did not close above the So, you want to have this sort of like mechanical rule in your system, right?
[43:28] So, if you got a wick break, it does not constitute as a valid break of structure or a valid market shift. You need a candlestick body closure. candlesticks in the next lesson, but for now, just understand that
[43:42] that that rule that I just laid out right there is very, very important pullback or the reversal is actually valid or Okay, so in this case, price comes down here, giving us another break of
[43:55] can see the minute price breaks structure, don't waste time, take your internal break of structure, put it right there, and move your internal high from here to here. And then, now this becomes the new low,
[44:07] the new internal low. Okay, and then later on, price started reversing, right? So, we are playing within this internal range right here, and then later on, price starts, you know, consolidating
[44:20] here a little bit. This is an example of a sideways market, where price is within the swing high, swing low, within the internal high, internal low. It's not going to the downside because it has not taken out
[44:33] this low. It's not going to the upside since it has not taken out this high. It's just going sideways just like this. So, as a result, this is where the bias is unclear. Once again, the buyers and the sellers are actually playing a
[44:46] So, nothing happens. Boom. Eventually, price went up there and take out this 1-hour strong high. Now, what does this mean for us? This Now, what does this mean for us? This means that the trend direction has just
[45:01] shifted bullish. Because price is literally gotten so much buying pressure, so much buying momentum that it causes price to actually went up there and take out a strong high.
[45:14] to continue going down, coming up, respecting the new lower high right here, and then bearish just like this. But in this case, that did not happen. Right, what
[45:29] take out the high, giving us a market shift. >> [snorts] >> this is where, you know for a fact that shifted bullish. And right here, you can see
[45:44] that what we have over here is price is just starting to create higher highs and higher lows, higher highs and higher lows. Right, so we can potentially map this up as the new internal break of structure, and then there's another
[45:56] internal break of structure right here. And if I were to actually map out my internal structure again, this was the last internal high, last internal low. Later on, this becomes the new internal high and this becomes the
[46:09] new internal low. This becomes the new internal high and this becomes the new internal low. Right? So, by right, this becomes the most recent internal high and this becomes the most recent internal low.
[46:24] So, now this becomes the internal range that we want to focus on. that we want to focus on. Okay? So, in this case itself, since the market structure is bullish right now, I want to look for longs.
[46:38] Okay? I want to look for longs. So, right now, just look at the market structure. Higher highs and higher lows. Okay? Wait, no, that's not how I draw it. That's like this, comes down, pulls
[46:50] Right? So, this high previous This high higher than the previous high, this low higher than the previous high uh previous low and this is where Actually, let me just take a look at this right here. Right? So, I forgot to
[47:05] actually point this out, but you can see this is why it's so important for you guys to like just look at price closely. So, this is the last high, price pulls back, comes up, pulls back and then goes up.
[47:19] close like somewhere around here. Okay? So, this is the lowest point that led to price actually breaking structure. led to the start of the pullback. So, by right, this is actually the last low.
[47:35] And look at what a candlestick did. Candlestick came all the way down here and take out the last low, giving us a market shift. Which signaled to us that right now the internal structure has officially
[47:47] shifted bearish. Okay? So, now instead of looking for longs, we should be looking for shorts. Now, this could also be a liquidity want to talk about later on. Right? If this is a liquidity sweep, then this
[47:59] could potentially still be price pulling back and then later on for price to go not going to confuse you whatsoever right now. Just stick to market mechanical principles and you will come to a conclusion that okay, this becomes
[48:14] a strong high right now because right now we're actually in a downtrend since here. And then this becomes the new weak low.
[48:26] that's how I would go about just mapping out this entire structure right here. You can see if you just apply the principles that we actually teach here, you will not go wrong. Right? You will always come to the same conclusion as I
[48:39] And for majority beginners out there, I would just advise you to practice this on one time frame right now. Right? So, practice this on either the 4-hour time frame, the daily time frame, the 1-hour, or the 15-minute time frame. Just try to
[48:52] practice identifying a swing and internal structure on one time frame. Just really training your eyes [snorts] to spot all these break of structure, market shift, swing range, internal range. And the more you practice, the
[49:05] better you get at it. Right? Just like anything worthwhile in life, it requires you to put in a lot of reps and also give yourself some time for your Right? For you to like just get more competent at analyzing the charts.
[49:22] showed you guys like the importance of like just overall mapping the market structure and also given you the tools that you need to clearly define who's in control of price. And to keep things simple, basically market structure is
[49:36] the pattern of highs and lows price tends to leave behind. If price is making higher highs and higher lows, the market is bullish, the buyers are in control. If price is making lower lows and lower highs, the market is bearish,
[49:48] the sellers are in control. And if price is moving sideways just like this without clear direction, the market is ranging. So, your job as a trader is to stop guessing what price is doing and start
[50:00] reading the story properly. Start building a narrative based on what the market is telling you. And when you do that, you will finally is. So, with that being said, I look forward
[50:12] to seeing you guys in the next episode. And as usual, just go and like and subscribe and just click that bell button so that you can get notified when the next episode actually drops. And as always, remember you guys are
[50:25] just No, as always, remember you're just one trade away. Cheers. Mwah.