Qazi Forex Tips
In this lecture
- How market structure shows direction and entry timing
- Market structure as the base of Smart Money Concepts
- Liquidity, imbalance, points of interest and order flow
- Practising structure with price action and candle reading
Lesson notes
The three states of the market
- Uptrend: higher highs (HH) and higher lows (HL).
- Downtrend: lower highs (LH) and lower lows (LL).
- Range: price moves sideways between a high and a low.
BOS and CHoCH
A break of structure (BOS) is a break in the direction of the trend: a new higher high in an uptrend. A change of character (CHoCH) is the first break against the trend: in an uptrend, price breaks the last higher low. A CHoCH is the first warning that the trend may be changing.
Where Smart Money ideas fit
Concepts such as liquidity (where stops sit, above highs and below lows), imbalance (fast moves that left gaps), points of interest and order flow all sit on top of structure. Without reading structure first, these concepts are confusing.
Khulasa (Roman Urdu / Hindi)
- Uptrend: HH aur HL. Downtrend: LH aur LL.
- BOS: trend ki taraf break. CHoCH: trend ke khilaf pehla break.
- Liquidity highs ke upar aur lows ke neeche hoti hai.
- Smart Money Concepts ki buniyad market structure hai.
Questions
What is market structure in forex?
The pattern of swing highs and lows: higher highs and higher lows in an uptrend, lower highs and lower lows in a downtrend, or a sideways range.
What is BOS in trading?
Break of structure: price breaks a swing in the direction of the current trend, confirming it continues.
What is CHoCH in trading?
Change of character: the first break of structure against the trend, an early sign of a possible reversal.
Is market structure part of Smart Money Concepts?
Yes. SMC ideas such as liquidity, order blocks and imbalance all build on reading market structure.
What is liquidity in forex?
Areas where many orders, especially stop losses, sit: above swing highs and below swing lows. Price often moves to these areas.
Which timeframe is best to read market structure?
Read the main structure on H4 or Daily and the entry structure on H1 or M15.
Related lessons
How to identify swing highs and swing lowsMarket Analysis
How to spot a trend reversal earlyMarket Analysis
The classic trading method: a guide to market structure (Part 1)Education only, not financial advice. Trading forex, Gold and CFDs carries a high risk of loss. Examples are for learning; test any method on a demo or in a simulator before using real money.