Market Structure
The concept of market structure is crucial in price action trading, offering insights into market behavior through key patterns and transitions.
Market Structure
Break of Structure (BOS):
Occurs when price breaks a previous swing high in an uptrend or swing low in a downtrend, confirming trend continuation.
Change of Character (CHoCH):
Happens when price breaks the opposite side of the current trend — for example, in an uptrend, breaking below a previous higher low — suggesting a potential trend reversal.
Delta Volume Calculation:
The latest enhancement to this feature adds a new layer of analysis through Delta Volume Calculation. When a BOS or CHOCH is detected, the toolkit calculates the delta volume within the range from the high or low point to the break point.
This analysis considers all the candles in this range and determines whether the volume is predominantly bullish, bearish, or neutral.
◆ Bullish Volume: If the delta volume is bullish, a green diamond is plotted at the high or low point, indicating potential upward momentum or trend continuation.
◆ Bearish Volume: If the delta volume is bearish, a red diamond is plotted, suggesting downward pressure.
◆ Neutral Volume: When the volume is neutral, a yellow diamond is displayed, indicating a balance in buying and selling forces, which can signal the exhaustion of the volume pressure and trend reversal.
Market Mapping
Market Mapping is a zigzag-based structure tool that outlines the market’s flow by marking key swing highs, swing lows, and trend shifts.
It provides a clear overview of internal and external structure by connecting confirmed pivots with solid lines — and now includes real-time mapping using a dashed line to show the currently forming swing before it is confirmed.
Strong/Weak High and Low
In the context of market structure trends, an indicator was developed to display the range of market swings, including equilibrium, high, and low points. Based on the direction of the market structure trend, the indicator highlights strong or weak highs and lows.
If the trend is upward, the low is considered strong, while the high is weak.
Conversely, if the trend is downward, the high is strong, and the low is weak.
Structure Candles
Highlights candles that form internal market structure points using specific colors. Helps visually isolate candles forming key levels.
Equal Highs and Lows
Equal Highs and Lows refer to price levels where multiple highs or lows occur at approximately the same level, forming a horizontal line on the chart.
They are significant because they represent key areas of liquidity and often act as magnets for price action.
Double Tops (DT): When price creates two or more peaks at the same level, it indicates a strong resistance zone. Many traders place stop-loss orders above these highs, creating a pool of liquidity.
Double Bottom (DB): When price creates two or more lows at the same level, it forms a support zone. Traders often place stop-loss orders below these lows, creating liquidity.
Swing Data
Each confirmed swing point is marked with a detailed label showing:
Structure Type: HH, HL, LH, LL — identifying higher highs, higher lows, lower highs, and lower lows.
Price Level: Exact price of the pivot high or low.
Price Change % (PC): The percentage distance from the previous swing, helping traders instantly see the strength and size of each move.
Settings
The Market Structure settings allow traders to customize how price structure and trends are analyzed and displayed on the chart. Here’s a breakdown of each setting:
Last updated