Market Structure Basics | Smart Money Concepts

Market structure is the skeleton of the market. Without understanding structure, you are trading blind. It tells us the direction of the trend and when that trend is likely to reverse.

Trend Identification

A bullish trend is defined by a series of Higher Highs (HH) and Higher Lows (HL). A bearish trend consists of Lower Lows (LL) and Lower Highs (LH).

Break of Structure (BOS)

When price breaks a previous high in an uptrend (or low in a downtrend) and closes beyond it, we have a Break of Structure. This confirms the trend continuation.

Key Rules

Always wait for a candle close to confirm a BOS. Wicks are often just liquidity grabs.
Map structure on higher timeframes (4H, Daily) for direction, and lower timeframes (15m, 1h) for entry.

Market structure is the skeleton of the market. Without understanding structure, you are trading blind. It tells us the direction of the trend and when that trend is likely to reverse.

Trend Identification

A bullish trend is defined by a series of Higher Highs (HH) and Higher Lows (HL). A bearish trend consists of Lower Lows (LL) and Lower Highs (LH).

Break of Structure (BOS)

When price breaks a previous high in an uptrend (or low in a downtrend) and closes beyond it, we have a Break of Structure. This confirms the trend continuation.

Key Rules

Always wait for a candle close to confirm a BOS. Wicks are often just liquidity grabs.
Map structure on higher timeframes (4H, Daily) for direction, and lower timeframes (15m, 1h) for entry.