Trading. Forex. Training.: Structure break

Structure break should not be confused with trend break.

At first glance, these two completely different chart elements are very similar to each other, market participants set stop losses behind these chart elements.

However, these chart elements, for us, carry radically different information.

The next article will be about trend break.

Now we will talk about structure break.

Structure break is one of the elements of the price trend movement reversal model.

Structure break can be easily determined by applying structural analysis to the analyzed section of the chart.

So, to determine the structure break, we need to determine that we have this structure

The structure is formed in two stages:

1. Directly forming the structure.

2. Development of the structure.

Only then, when the structure is found, we look for or expect its break.

Structure formation is the first three movements in a new direction.

Structure development is an already formed trend, when there is a decrease in low and a decrease in high or an increase in high and an increase in low.

And here is the most interesting thing - a breakdown of the structure is a movement in a new direction, these are the first three movements in a new direction (formation of a new trend in a new direction).