suriNotes.com -- Chart Patterns, Algorithmic Trading, Pattern Recognition, Auto Trader

Market Structures

Market Structure formation is a price phenomenon occurring at major turns. Prices start with a wave (lets say Up) and it ends at some point and then there is down-wave, and it ends some time and then up-wave. These wave formations start with the Market Structures. Market Structure Low (MSL) and Market Structure High (MSH) formation is continuous and is repetitive at every wave begin and every wave end.

Market Structures form in all markets, all time-frames and in all instruments. They fail and refail, form and re-form. Market Structure is a concept pattern. It needs other indicators, support/resistance levels, triggers to confirm the theory and its works.

How to Trade

Market Structure High (MSH)

A Market Structure High (MSH) is formed when markets are making major tops. The Market Structure High (MSH) definition is when markets make a new high followed by higher high followed by lower high.

Trade:
A MSH short trigger (after 3-bar MSH formation) is signaled when price closes below the low of the third candle. A stop is set above the MSH pattern high. Targets: One is to trade until another MSL forms near a key significant level. The second method is to trade with a trailing stop using the previous

Market Structure Low (MSL)

A Market Structure High (MSL) is formed when markets are making major bottoms. The Market Structure Low (MSL) definition is when markets make a new low followed by lower low followed by higher high.

Trade Examples

Trading Market Structures

The example above illustrates a Market Structure trading formation on Russell Emini futures (ER2) weekly chart. In April, 2002, ER2 formed a Market Structure high at 560 level. A short trading signal was triggered the following week at 540 level. A stop is placed above the high
of MSH at 565. A profit level for MSH trading is set either at a previous level, or until another MSL to reverse its trend direction. A similar trading opportunity for MSH is presented again in December, 2002. A MSL trading opportunity is shown in April, 2003 around 420 levels. A
stop loss is set at MSL low at 390.

FULL Disclaimer/Terms & Conditions

DISCLAIMER: THE RISK OF LOSS IN INVESTING STOCKS, FUTURES, OPTIONS, FOREX OR COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH INVESTMENTS ARE SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION, YOUR INVESTMENT EXPERIENCE AND OBJECTIVES, FINANCIAL RESOURCES AND OTHER RELEVANT CIRCUMSTANCES. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS, AND LOSSES ARE ALWAYS POSSIBLE. THE STRATEGIES OR TRADE SETUPS MENTIONED HEREIN SHOULD NOT BE CONSTRUED AS CONSERVATIVE STRATEGIES BUT RATHER SPECULATIVE AND FOR SHORT-TERM TRADING PURPOSES ONLY. THERE IS EQUAL OR GREATER POTENTIAL FOR LOSS WHILE USING THIS STRATEGY AND TRADE SETUPS.

All information, graphs and depictions represented in this site are OPINIONS and HYPOTHETICAL PERFORMANCE RESULTS and should be recognized as such and are not solicitations or instructions to execute orders. You shall be responsible for any decision to purchase and/or sell any of the futures products depicted herein. The owner of this site makes this material available to the public but assumes absolutely no responsibility or liability. The website contains links to other websites. These links are provided as references to identify and locate other internet resources that may be of interest. These other websites were developed by parties independent of the owner of this site and as such the owner does not assume responsibility for the accuracy or appropriateness of the information contained at, or endorse the viewpoints expressed at, such websites. Copying with intent to redistribute any part of this website is expressly prohibited without prior written consent and is and punishable under United States copyright law. All rights reserved.