Chapter 1 lesson 5 - market structure changes Flashcards
Can large institutions see where stop losses are?
No one can see where someone else stop losses are. The algorithm however looks to trade into specific areas within a certain time frame, or time lapse where it is common for traders to place their stop losses.
Are there reference times on all time frames?
Reference to time yearly would be the quarterly shifts.
Reference to time for market structure shifts would be the 20, 40 and 60 day look backs.
The are also references to time on an intra day level.
Where does the algorithm look to deliver price to.
The algorithm has a reference to price, but it needs a reference to time where it would go on the short term to collect liquidity.
The algorithm will look at specific date ranges to deliver price to.
1st date range is 20 days
2nd date range is 40 days
last date range to consider is 60 days.
What is a market structure shift?
A market structure shift is what indicates a change in trend from bullish to bearish, or bearish to bearish. It’s also referred to as a change in the state of delivery.
It happens when displacement occurs over or below a swing high or low.
What is displacement?
Displacement is an aggressive move with full bodies candles. This can be a single candle, or multiple candles. The easiest way to spot it is to look for fair value gaps(FVG).
How do we identify a market structure shift?
In a bullish trend, prices raids buyside liquidity, displacement(FVG) below a previous low and creates a new low.
In a bearish trend, prices raids sellside liquidity, displacement(FVG) above a previous high and creates a new high.
It’s important for bodies to close over/below the previous structure, not just the wick.
