If you struggle with knowing whether a trend is likely to continue or reverse, this is the video for you because in this video I'm sharing a 100% mechanical way to know whether a trend is likely to continue or you're about to get that reversal helping you stay on the right side of the market. So if you're new here, my name is Justin Bennett, founder of Daily Price Action, Forex trader since 2007, full-time trader since 2011. All right, so in this video we are talking about SMC market structure.
Okay, so for some of you this could be familiar, for others this is going to be brand new. Now for those of you who this where this is brand new I want to start with some basic concepts here and even if you know SMC even if you know SMC market structure and you're familiar with it I urge you to pay attention here even through this part because you might learn something new okay so looking at this blank chart right let's start here because before we get into an actual chart I want to explain what defines a market uptrend downtrend and consolidation and also those key terms that we need to know in order to put this method into practice so the very first thing let's go ahead and draw out some very simple lines here. Okay, so we're going to draw first of all an uptrend up here.
So higher highs and higher lows. Most of us are very familiar with that and then we also have a consolidation period, right? So these are the three um essentially the three things that a market can do, right?
You can either get consolidation like this where the market just goes sideways, you could have an uptrend or you could have the market moving in a downtrend. Okay, so lower highs and lower lows. So most of us are familiar with this.
Now, what you might not be familiar with are terms like internal and external highs and lows. So, let's discuss that for a moment before we get into a couple of SMC terms that you need to know. So, the first one is going to be the fact that in any given time frame, you're going to have internal time frames.
Now, with the exception obviously of the one minute chart, although you could even make the case that the one minute chart has the one second chart if your platform has it, but really for most time frames, you are going to have internal time frames. Okay? So in other words, you are going to have a case where you have these external highs and lows.
So if we assume for a moment that this is an hourly time frame. Okay? So these highs and lows are on the hourly chart.
So within this, what you're going to have is you're going to have lower time frame highs and lows along the way. Okay? So it's going to look something like this, right?
Really choppy um and very kind of almost erratic, right, in this within this trend. So what this is showing you here is these internal highs and lows right here fit within this hourly trend. Remember this is our hourly trend.
So this right here, these highs and lows could be something like a five minute. Okay, so you're going to have these internal highs and lows along the way. So these are all internal and these up here that you see are external.
Okay, so in terms of market structure, this is really really critical. In terms of market structure, you always want to pay attention to the external highs and lows. So all of this through here, if this is an hourly time frame, all you're looking at are these hourly highs and lows.
We don't really care about what's happening here in the middle. Okay? So the only thing that's going to uh give us a directional bias on the hourly time frame are those highs and lows that are occurring on the hourly time frame, not the 5m minute, not the 15-minute.
Okay? So that's the very first thing to understand. The same thing goes for a downtrend and even consolidation.
You have external highs and lows and you have those internal highs and lows as well. Okay? So you have something like this here, you know, within this trend.
So if this is an hourly chart, you have highs and lows that develop through here, you know, something like this. Obviously, a little bit messy, but just getting my point across here where you have these highs and lows on the hourly and then you've got these internal highs and lows. So this internal structure within this external structure, the only thing we care about in terms of market structure when we're looking at SMC is going to be these external highs and lows.
Okay. Okay, so another way to say that is if you are on an hourly time frame and this is a question that I get a lot where if you're on the hourly time frame, everybody says, "Well, what about the 15-minute? What about the 5minut?
How do we account for all these different time frames? " Because you could essentially have a market and you do have a market in this case that isn't an uptrend on the hourly. However, on the 5minut, it could be in a downtrend right within this leg.
So, people ask, well, how do you account for all of that? And my answer is always pick a lane. Pick a time frame and use that time frame and forget everything else.
Now, you could have multiple time frames and in fact, you probably should and I do with regard to identifying a directional bias and then also refining your entries. So, you can have multiple time frames, but what you don't want to do is get in this endless loop of trying to identify every single time frame and the highs and lows on those time frames because you will drive yourself absolutely crazy. Okay?
So, just pick a lane, pick a time frame. Um, in my opinion, the hourly is a great place to start because it's going to give you a couple of opportunities every week, but it's not such a low time frame where you're going to get a lot of noise. And that's the second thing I want to talk about here is that if you try to identify something like this, right, the highs and lows on a fivem minute time frame, what you're going to notice is that you're going to have a lot of noise.
Okay, you're going to have a lot of noise to the point where it becomes difficult to try to define uh what the market is doing at any given time. So, I think the hourly, maybe a 30-minut time frame is a great place. The 4 hour is also a great place.
Although you're you're going to get less opportunities if you're on the 4 hour or daily time frames. Okay, so we've talked about the three things that markets can do. They can either trend higher, trend lower, or consolidate, right?
And we've also discussed external highs and lows versus internal highs and lows. We want to use these external highs and lows. Now, another thing we need to discuss here before we get into an actual chart is going to be uh are going to be two terms, two SMC terms called the breakup structure and change of character.
Okay, so let's bring up the text tool here and write these out so you guys become become really familiar with it. So we have breakup structure and this is going to be abbreviated as boss. Okay, so we have breakup structure and the second one is going to be a change of character.
Okay, so next is going to be change of character and this is abbreviated by cho. All right, so we have breakup structure change of character. Now, if you're not familiar with SMC, this might sound a little bit odd because if you first hear break of structure, what you're thinking is that that is a break of a trend.
Okay? In other words, you have a structure being an uptrend and it's a break. However, that is not the case.
So, a break of of structure here is actually a trend continuation. Okay? So, breakup structure is trend continuation.
The idea being that when you have the market actually breaking a high. So in this case we have this uptrend on the hourly. You have the market breaking that high.
This is the breakup structure right here. So breakup structure meaning that within this uptrend you have the market consolidating back here and then you have the breakup structure and that continuation. Okay.
So breakup structure equals a trend continuation. So therefore we can say that a change of character is a trend reversal. Okay.
Now, change of character sounds odd, right? When you first hear this, you're going to think that's a really strange name for a trend reversal until you realize that there are two characters in the market. So, we have a bull and a bear, right?
Two characters in any market. And so, a change of character is literally going from a bull to a bear or a bear to a bull. So, once you understand that, change of character takes on a whole new meaning.
So, we have trend continuation, trend reversal. Okay. So, let's talk about these two in terms of this um chart over here.
or these drawings that we've made and identify what is a breakup structure, what is a change of character. So in this case right here, we have this high within an uptrend. Okay?
So as soon as we close above this high, and this is key, you have to close above this high. So if this is an hourly chart, you have to get an hourly close above this level. And we'll look at a a real chart here in a moment on the EuroUSD, but for now, I want to stick with this because it's just very simple uh to help you guys grasp these terms.
So this right here, you need an hourly close above this high back here. If it's a wick, it does not count. And so you need that close above.
This is a breakup structure or BOS. Okay? And the only thing that this tells us, this is not a key level.
For those of you coming from price action, you're going to be tempted to treat these levels that we're going to draw within the chart above as key levels. In other words, you're going to look at this and say, "The market's breaking out. I want to buy against this.
" And that is not what you want to do because in most cases what you're going to get is the market actually dropping below here right back down here into discount or inefficiencies that build up down here and then continuing within this trend. Okay. So we'll talk about that more in later videos.
This video specifically is just defining SMC market structure and how to use breakup structure and change of character to make sure you're staying on the right side of the markets. So we have this breakup structure here. Let's go ahead and label this so we stay clear, right?
So breakup structure BOS. Okay. So again, same thing up here.
You can see where we had the close above this high. And the only thing that this is telling us, this is not a breakout. Okay, this is not a breakout.
This is simply the market just telling us that buyers remain in control. Okay, so I don't want you guys thinking that this is a breakout again in the sense that we have a break and you want to buy against this level because in a lot of cases again what you'll see is the market will drop well below it back here into some inefficiencies to clean up the liquidity that was left behind during this move and then continue in that direction. So if you start thinking of these as breakouts and buying against these levels, you're going to get yourself in trouble.
Okay, so breakup structure, breakup structure. Now let's talk about for a moment a change of character. Okay.
And obviously the same thing applies here for this downtrend where you have the lows down here, right? This would be a bearish breakout structure where you get the market actually closing below this low back here. So bearish breakout structure here and also bearish breakout structure here.
Okay. So again, this just tells us that sellers are in control back here and that buyers are in control up here. That is the only thing that we're doing here.
Okay. Now, let's talk about a change of character. How does that look?
So, if we take this here as our uptrend and we map out something like this, let's say we get the pullback here, the market comes up, makes a a lower high, although it doesn't have to, but this is a stronger reversal signal. Um, which I'll explain in in future videos as well. But this right here, okay, if you get something like this, what happens here is on the way up, you're marking these levels and you're saying, "Okay, these are the levels that buyers have to defend, right?
Because it's an uptrend. You don't want to see the market closing below these lows. " Okay, so it didn't hear.
it didn't here. We got the bullish break of structure. Buyers are in control.
And the same thing back here. So, we had this low right here. We had a break of structure on this high.
So, we had the close above. And then what we had is sellers taking over and closing the market below this low back here. Now, here's an important part is that any change of character has to originate from the low or the last low in this case that produced the breakup structure.
So in other words, this last break of structure was up here. Okay? So this high.
If we take this and follow this back to the last low, it was this one. Okay? So this change of character right here once we close below, this is the low we have to use.
It's the last low that triggered the breakup structure. Okay? So this right here, let's just keep it clean here and label this as our change of character.
Okay? So that's our change of character. This right here tells us that sellers are now in control and we want to be looking for shorts only.
Okay, so shorts only here against inefficiencies once we get that change of character back here, buys only because we know buyers are in control. All right, and the same thing down here. Let's go ahead and run through this here quickly before we get into a chart.
So, let's say we have the market putting in a retracement here, puts in a higher low. And again, it doesn't have to. And here's okay, actually, you know what?
This is a good uh good stopping point because what happens a lot of times is this, right? So, if you'll notice here, we have this high back here. And again, when the market's trending lower, what you can do, especially when you're practicing this stuff, is just draw horizontal levels.
And you'll see this in the Euro uh chart above once we run through this, but just draw your horizontal levels, right, in a downtrend like this, and say, "Okay, these are the levels that sellers have to defend. " As long as we're doing that and we're producing these breakup structures, then sellers are in control. Now, as soon as we get a break above this, buyers are in control.
However, what tends to happen is in this case, if you have this low right here that doesn't take out this one, that doesn't close below, what happens is a lot of traders start to use this high and they look at this and they say, "Okay, this is a change of character. " Now, it could work out. Okay, that could be.
However, technically speaking, this is not the high that you should be using. And the reason for that, it goes back to the fact that any change of character, right, has to originate from, in this case, the high that produced the last break of structure. So, in other words, if we look here at this, okay, so this breakup structure right here, if we move this over, right, copy this over, this was our last break of structure.
We got the close below this low right here. Okay, so we closed below here. This high up here was the high that produced the last break of structure.
Therefore, this is the high that you need to mark out, not this stuff here. And this goes back to what we discussed earlier about external highs and lows and internal highs and lows. All of this right here is internal.
It's all internal to this right here, this high and this low. If you notice all of these right here, this high, this low, this high, this low, all of this is internal to this high up here and this low down here. Okay?
So that's very important that you have to anytime you're dealing with a change of character, it has to originate from, in this case, the last high that produced the last breakup structure. Okay? So if we walk this forward here, let's finish this up and then we'll get into a EuroUSD um real chart to to explain this.
So if in this case we were to get the move above here like this, then that right there is your change of character. Okay? So the change of character actually happens over here, not within this.
So this right here now becomes our change of character. Okay? Because you could have in this case, you could have had the market do this and you think that this high right here is the change of character and the market's flipping bullish and then it could have just continued lower.
Okay? So, it's very important to confirm this with these external highs and lows and not the internal highs and lows. Okay.
So, let's go and move on now and look at a real example here, real chart on the Euro USD. We're going to use the hourly time frame. Um, just because I do think it's a great time frame to use, especially if you're learning this stuff because the issue is if you drop too low of a time frame, then you're going to get a lot of noise.
It's going to be difficult to to determine uh what those external highs and lows are. So, even this right here, and by the way, I am not cherrypicking this. This is literally the last couple months of the Euro USD price action.
So, you could do this on any chart, any time frame, it works. But again, I do um suggest that when you're learning this stuff to kind of stick to the hourly or above, you could drop to the 30 minute or even 15. But again, the lower you go, the more noise you're going to have in the chart.
Okay, so let's go and play this forward now. And as we do this, I'm going to go ahead and mark out these highs and lows. So here we have a downtrend clearly, right?
We have a downtrend here in the Euro USD. So during this time frame, what we would do is we would go ahead and just look at these highs and lows to determine right when we have the breakup structure or the change of character. So in this case here, you can see that we do have a break of structure off of this low down here.
So off of this low, we have a break of structure, right? And this is a bearish break of structure because we are in a downtrend. Okay?
So this is the high up here that has to be defended. Now, as soon as we get a breakup structure, okay, so this is great now that we're we're real time here because you can see we had the breakup structure, the close below that confirmed that sellers remain in control. Now, at this time too, what you can do when you're learning this stuff is you can go ahead and draw out a horizontal line off of this high up here now.
And the reason be for this is because this is the move right here. This is the high that triggered this breakup structure, okay? To the downside.
So if we play this forward now, let's see what we get here. Okay, so the euro is coming up now and testing that high. And what you can see right there, guys, this is really important because this right here, this close above is a change of character.
Okay, so again, we have the last high that produced the last break of structure. Okay, so if we have this low down here that produced the breakup structure, we follow this back to the last high, it's this one right here. And if you'll notice too, this isn't just a fluke or or you know, you know, getting lucky in this case because if you'll notice during this downtrend, what you can see here is that we had a series of lower highs and lower lows.
Okay? So, the market never did this before. If you'll notice, all of these highs up here are lower highs.
This right here is really the first higher uh high within this downtrend. Okay? So, this right here, the close above is our change of character.
Okay? So, let's go ahead and label that to keep things straight here. So change of character here.
I'm going to remove this for now to keep things clean. Okay. So that is our change of character.
Now at this point we know that within this downtrend buyers are starting to take control. The key word there is starting though because there are no guarantees in the market ever. Even if you have you know full confirmation.
Um but in this case we have the start of a potential reversal. So at this point if you were looking for shorts during this downtrend this would be a good time to pause and say okay wait a second. Buyers are starting to take control.
But we're seeing some strength now in this market. This was a pretty aggressive move up. And we also closed above this high, right?
That last high that produced the breakup structure. So at this point, if you were shorting, you probably want to stop, right? Not not financial advice, but that's always the best thing to do here when you see the market finally starting to turn.
And so with this now, and again, here's where traders get themselves in trouble because they they look at this as a breakout and they think, "Okay, if we close above here, then I want to buy against this high. " And that nine times out of 10 is going to get you in trouble. And that's not what we want to do here.
In future videos, I will talk about um entry methods and how to use this uh really the same method in order to confirm entries. But that's not really the the way to go here because if you start doing that, what you're going to find is that inefficiencies build up along the way and the market has a way of coming back here and tagging these inefficiencies down here before moving higher. Okay?
So, if we go ahead and play this out now, and again, this this right here, guys, it's important too. this change of character. The only thing this close above this high tells us is that buyers are starting to take control.
That is it. This is not a key level in the market. Um, yes, it is off of this high, but the only thing this serves right now is just to tell us that buyers are starting to take control.
Okay, let's go ahead and play this forward now and see what we get. So, here we have the market dropping down here, and this is what I mean. We're dropping down there into those sellside inefficiencies that developed along this move.
Okay, so now we have the move back up here. And before we get there, I'm also going to um draw a level off of this high, okay? Because this now becomes the high that the market has to break out in order to give us that first higher high.
We've had the change of character back here, but we want to see that, you know, that confirmation that buyers are truly taking control. Okay? And if you'll notice here, we move up and test the level a couple of times, don't break through, and this right here, this wick does not count.
Okay? The wick does not count because we're on the hourly time frame. This was an hourly wick.
We did not close a candle above this. Okay? So, let's go ahead and keep moving forward.
Okay. And on that candle right there, um, what you can see here is that we finally got the close above. Okay.
So, we got the close above here. So, this now is a break of structure. Okay.
Because now we're bullish, right? We had the change of character back here, breakup structure once we close above. So, this right here too, as soon as we get this close, what we can do is go back to the last low that produced this.
So, we had the close above up here. This was the low that produced that break. Okay?
So this is the low now that you want to see the market hold above. You do not want to see the euro closing an hourly candle below this low here. Okay.
So if we now map this out. So this is our low now that we've had the break of structure that buyers have to defend. Okay.
So we have the break of structure. Let's play this forward and see what we get. Okay.
So moving forward you can see we're kind of consolidating here a little bit. We did drop below that breakup structure but again these are not key levels. All this is serving is just to tell us that the market is you know in an uptrend.
Buyers are in control. Now, once we had this too, I should have mapped this out earlier, but once we had that break of structure, this becomes our new high, right? So, this is now the new high that buyers have to break above.
And what you'll notice back here is that we did not close above it here. We wicked above. We didn't quite close above here.
We did close above through here. So, once we have this, you know, once again, buyers are in control. That's the only thing this is telling us.
It is not a key level. In future videos, I'll get into areas of interest, how to define those, and also where to enter into trends like this. Okay, so breakup structure right there.
And once we have that break of structure, we can move this level up because once again in an uptrend, this is now the low that buyers have to defend. And the reason we know that it's this low is because again, this was our new breakup structure here. If we move back from this, okay, this was the last low.
So this is the low that buyers have to defend. Now, so moving forward, let's see what we get. Okay, so we're pulling back now into inefficiencies down here, right?
And now that we've had a pullback, right, this high up here becomes the level to watch. Okay. Now, what defines a pullback for me is I want to see at least a few candles pulling back.
I mean, ideally, you want to see a few candles in a row pulling back on the hourly. So, in other words, you want to see at least, you know, three or four, ideally even like five. And here we had four red candles right here on the hourly pulling back.
So once I have that, I know that this is now kind of my high to watch within this trend where we could get an add additional breakout structure or we could get a reversal materializing from this. Okay, but that becomes the high now to watch uh for the EuroUSD. All right, so moving forward, we're just consolidating going sideways.
We don't have a breakup structure. And now what you'll notice is that we have this big big sell-off here from the Euro. Now, here's a great point as well because all of this sideways consolidation, the thing to remember is that the low that produced the last break of structure.
So, the last BOS was this right here. Okay? So, this area through here once we closed above, that was the last break of structure within this uptrend.
Okay? So, if we track back to the last low, now you could technically use this one. However, what you'll notice is that we only had one, two candles pulling back.
So, for me, that's a little bit too shallow. It's a little too shallow for me to call this the low that buyers have to defend. Okay?
Although in this case it would have worked out because you would have had a change of character over here and then you can see we got a lower high. But for me, if I'm trading this real time, you know, just full transparency, I'm looking at this low down here because again, this pullback isn't quite enough. It's a little too shallow for me to use this low.
I'm looking at this low right here that produced this breakup structure. Okay? So, this is the low that buyers have to defend.
They failed over here. Here you can even see where we got the bounce right here on this candle, but they failed right here, making this a bearish change of character. Okay, so we flipped from bullish to bearish.
So if we label this here as a change of character, this is where sellers started to take over because notice back here, we did wick above it just barely. Okay, on this candle right here, we wicked above. We didn't close above.
So this was the high, we wicked above, we got a lower high, we broke down, breaking this low over here, giving us that change of character. Okay, so if we play this forward now, let's see what we get here from the euro. Okay, so we have the change of character.
We know that sellers are starting to take control or regain control really. And so if we move this forward, you can see where again, if you had treated this as a key level and you were trying to short against this, um you would have gotten yourself in trouble because this right here probably would have stopped you out. And so that's not what we want to do.
All this is serving. The only purpose of this is to tell us that sellers are taking control. Okay, so playing this forward, you can see we got a continuation.
Now, once we had this move up, okay, what you'll notice here is that we had 1 2 3 four candles. 1 2 3 Okay, candles on the bullish side. So, this right here serves as our retracement.
Okay, now I'm pointing that out because then this becomes the high that sellers have to defend. And we know that this is the high sellers have to defend because we now have a bearish breakup structure. Okay, so this low down here got taken out.
So, this was the low that sellers had to take out in order to confirm a continuation. Okay, so this was a bearish breakout structure right here. This is the high now that sellers have to defend.
Okay, so once we play this forward, let's see if we get a retracement here. And you can see that we did get a few candles here pulling back. Okay, so for me, this qualifies, right?
We had three candles right here pulling uh pulling back into this sell-off. So three bullish candles. This low down here now is the level that sellers have to break.
And you can see where we did get that. Okay. So, if we take this here, move it down off of this low.
Again, the reason I'm using this low now is because we did have a retrace into this sell-off. We had three candles here. So, that qualifies.
This is now my low. You can see we had a breakup structure. Okay.
So, once we have that, all we do is we take this high up here. We move it down off of this high. Now, here's where it gets a little bit tricky because you could say, "Okay, well, it could be this high right here because this produced the breakup structure or this one up here.
" Um, personally, I like to keep it conservative. I like to say that, you know what, if buyers are going to take control again, I want to see them take out this high, not necessarily this one. Okay, so that now is the high that sellers have to defend and we now have a new breakup structure, giving us the indication that sellers remain in control.
Okay, so again during this entire time following this right here, this change of character back here, this told us that we wanted to start looking for shorts on strength. Okay, so shorts through here obviously back here when the market was in an uptrend, we wanted to be looking for buys only. So this just helps you stay on the right side of the market.
Um, and you'll see here as I play this forward that we do get, you know, the continuation down here and then we have, let's see, a pullback here. That qualifies as a pullback right there because again on the hourly time frame we have multiple green candles here in a row. Okay, so that means that this low now becomes the level sellers have to take out for a break of structure.
And they do. So we take this here, copy this down off of this low, we have a new break of structure. Again, sellers remain in control.
Now that we have this here, we can take this level up here and drag it off of this high. Again, I'm using the the conservative level here, which is this high up here, not this one. Uh, and that can matter in some cases, guys, because you could get the market actually, you know, closing above here, but not closing above here.
So, I would have to see buyers take out this high back here now that we've had that bearish break of structure to really confirm that buyers are regaining control. Okay, so playing this forward, you can see where we got the move up and this right here, we have one, two, not quite what I need. However, if you'll notice back here, we did have a few green candles.
Now, we pretty much went sideways there. Uh, but that could still be a significant low there for the euro. And it would be enough that in real time I would plot a level off of this one here just because you know things are getting pretty tight here for the euro.
Um but that's also kind of what we've seen here this year. So it kind of matches the price action we've seen. So this is now the low that sellers have to take out to give us a bearish break of structure.
And you can see right there we did it. Okay. So we got the close below.
We have a break of structure. Okay. And you can notice too this high never got taken out.
Right? So this is just a series of lower highs here for the euro. Right?
We never took out this high back here. Sellers remain in control. Breakup structure back here.
Breakup structure now over here. Okay, so sellers remain in control. So again, this just tells us that we want to be looking for shorts only right now.
All right, so let's play this forward and see what we get. Okay, now right there, you can see that we did get a few green candles. So what I can do is I can drag this now off of this low down here, right?
And this becomes now the level that sellers have to break in order to confirm a new break of structure. Okay, so playing this forward now. Let's see what we get here from the Euro.
We go sideways for a bit. We test that level. We do not close below.
We wick below it. But remember, this is not enough to confirm a break of structure. We need to close below.
Okay. Now, what you're going to notice here is that we do have the euro moving above these highs over here. So, consolidation through here and we had the euro breaking above.
Now, this could be kind of hinting at a reversal. Okay. But in terms of SMC market structure though, what you would have to see is you would really have to see in my opinion this high back here taken out.
And the reason for that is again we go back to the last high that produced the breakup structure. Right? We had three up candles here.
Okay? So I can use this high. We had the breakup structure to the downside on this candle.
So if we track back from this low here, again, remember we didn't have a breakup structure over here. So we can't use this high. So this was our breakup structure.
This is the low here. So if we track back to the last high, it's this one right up here. So really, even though you have the market taking out these highs, technically for this to be a true change of character, we would have to if if the euro had closed below here, right?
Closed below this low, then you could use this high. But because we didn't do that, this is our last low. This is the last high that produced that.
Okay, so hopefully that makes sense. This is really the level now that buyers have to take out. Okay, so let's play this forward and see what we get.
And you can see we are rallying up here toward the level. And right there we did close above. Okay, so even this right here, even this small close above, you can see this is right off of that high.
Even this close above right here tells us that buyers are now in control. So this tells us right here that we are now looking for buys because this tells us that buyers are regaining control. So this becomes our change of character, right?
And this down here was never a breakup structure because we did not close below. Okay, so bullish change of character right there telling us that buyers are starting to take control. And let's play this forward and see what we get.
Now, in this case, we really, you know, probably didn't get much of a pullback if I remember correctly. Um, and this does happen sometimes where, you know, and I'll talk about this in future videos, but when you get a market doing this, you know, eight times out of 10, maybe nine times out of 10 even, you get the market pulling back here into areas like this before moving higher. Okay?
Okay. And I remember this actually at the time I was looking for buys down here against this area of interest. Um, and we just didn't get it in this case and that does happen from time to time.
But the point here is that this right here, okay, identifying this kind of market structure here and identifying our change of character, breakup structure, all of that off these highs and lows, this right here would have told us that we're no longer looking for shorts. Okay, we're no longer looking for shorts. And just think about how, you know, how much trouble that could keep you out of, right?
If we take a look here and go back and just look at what we've done so far, you can see that this back here. Okay, so let's map this out. This back here was the bullish change of character right here.
So this meant that we were looking for buys, right? Look at where this occurs within this downtrend. Now over here we had the bearish change of character over here, right?
So from uptrend over here to downtrend, right? So change of character from here again change of character from right over here. we confirm it right here.
So, bearish this entire time and then bullish over here. Okay, so you can kind of see guys how this is incredibly incredibly uh significant and can really help you stay on the right side of the market. And if we play this forward, you'll notice that the market does go into an uptrend from here.
Okay, so higher highs and higher lows, it does get kind of choppy, but again, if you were a buyer and you were looking for buys here, then you would be on the right side of the market following this bullish change of character. Okay, so you can do this at any market. It works in any market on any time frame, but again, I really do advise to stick with the hourly, maybe 4 hour time frame.
You could drop down to the 30-inut time frame, but I really would not try to do this on the 5minut. Um, stay on those higher those somewhat higher time frames when you're starting out because it's going to provide less noise on the chart and just make it easier to go through this. So, if you enjoyed this content, subscribe to the channel.
