Market Structure

Market Structure

Overview

The Market Structure feature automatically identifies and displays key structural points on your chart, helping you to understand the underlying trend and spot potential shifts in momentum. It detects two primary types of market structure events:

• Break of Structure (BoS): Occurs when the price continues in the direction of the current trend by breaking a previous high (in an uptrend) or low (in a downtrend). This signals trend continuation.

• Change of Character (ChoCh): Occurs when the price breaks the most recent market structure against the current trend, signaling a potential reversal.

The indicator also adds a "+" sign (e.g., "BoS+" or "ChoCh+") to these labels to signify a high-volume break, indicating that the move is backed by significant market interest and is therefore more noteworthy.

This tool analyzes price action on both short-term and long-term bases, providing a multi-dimensional view of the market's structure.

Settings

You can customize the Market Structure detection to focus on the timeframes that are most relevant to your trading style.

Setting	Description
Short-term	Enables the analysis of short-term market structure and sets the lookback Length for detecting pivots.
Long-term	Enables the analysis of long-term market structure and sets the lookback Length for detecting pivots.
Adaptive Transparency	When enabled, the lines and labels for market structure breaks will adjust their transparency based on their significance.
Show Text / Text Color	Controls the visibility, size, and color of the text labels (e.g., "BoS," "ChoCh+").
Bullish/Bearish Color	Sets the colors for bullish (uptrend) and bearish (downtrend) structure lines for both short-term and long-term analysis.

Best Practices & Usage

• Confirm Trend Direction: Use a series of bullish BoS signals to confirm an uptrend, or bearish BoS signals to confirm a downtrend. A break labeled with a "+" indicates that the move occurred on high volume, adding extra confirmation to the trend's strength.

• Spot Potential Reversals: A ChoCh signal against the prevailing trend is often one of the earliest signs that the market may be about to reverse. A "ChoCh+" is a higher-confidence reversal signal because it is backed by significant volume.

• Combine Timeframes: Look for confirmation across both short-term and long-term structures. A short-term bullish ChoCh+ followed by a long-term bullish BoS+ is a very high-confidence signal that a new uptrend is underway.

• Adjust Length for Your Style:

  • Day traders may prefer a shorter Length for the short-term structure to see more immediate shifts.

  • Swing traders should focus on the long-term structure with a larger Length to identify major trend changes.

Equal Highs/Lows

Overview

The Equal Highs/Lows feature automatically detects and highlights areas on the chart where the price has formed two or more swing highs or lows at a similar level. These patterns are significant because they often indicate a buildup of liquidity and can act as powerful predictors of market reversals before they happen.

The detection is based on a specific set of conditions that identify true swing points with dominant wicks, followed by confirming price action.

• Equal Highs (EQH): A resistance level where buying pressure has failed multiple times, confirmed by bearish price action. This often precedes a bearish reversal.

• Equal Lows (EQL): A support level where selling pressure has failed multiple times, confirmed by bullish price action. This often precedes a bullish reversal.

Settings

You can enable or disable the detection of Equal Highs and Lows and customize their appearance.

Setting	Description
Show Equal Highs/Lows	Enables or disables the detection and display of these patterns.
Bullish/Bearish Color	Sets the colors for the Equal Lows (bullish) and Equal Highs (bearish) lines.

Best Practices & Usage

• Predict Reversals: The formation of Equal Highs can be an early warning that buying momentum is fading and a bearish reversal is likely. Conversely, Equal Lows can signal that selling pressure is weakening and a bullish reversal may be imminent.

• Identify Liquidity Zones: Equal highs and lows are key liquidity areas. Often, the price will eventually break through these levels in a sharp move known as a "liquidity grab."

• Use as Support and Resistance: Until they are broken, EQH and EGL levels act as strong resistance and support, respectively. A reversal signal at one of these levels is a high-confidence setup.

• Look for Breakout Opportunities: A breakout above an EQH level can signal a strong bullish move, while a breakdown below an EQL level can signal a strong bearish move.