Market Structure Shift

Market Structure Shift

As many traders know, the basis of the trend is that prices create higher highs and higher lows in an uptrend, and prices create lower highs and lower lows in a downtrend. Market structure shift (MSS) is the level at which previous trends are broken in the chart. If prices are on an uptrend, the level of market structure change is where lower lows are created. If prices are on a downtrend, the level of market structure change will usually be the point at which higher highs are made. In both cases, market structure changes tend to occur immediately after a displacement.

Once the price crosses the level of market structural change, wise traders will use the level of market structural change as a trading criterion to start looking for additional signs of whether the trend has actually changed.

The Rising Trend: The price seems to be going up, making higher and higher highs and lows like stairs

The downtrend: The price seems to be going down, creating lower and lower highs and lows like a staircase

Market Structural Change (MSS): Where This Staged Move Breaks

Rising Trends -> Turning Down Trends: Where You Can't Create Higher Bows, You Can Create Lower Bows

Decline Trends -> Turning Upward Trends: Where You Can't Make Lower Highs, You Can Make Higher Highs

MSS occurs primarily after a displacement.

In other words, a trend shift is likely to occur after the price moves strongly to one side.

If you're a smart trader, you'll check your MSS, look for additional signals to make sure you're sure you're trending, and make a buying strategy based on your MSS level.

Key: MSS is an early sign of a trend shift. If you capture it well, you'll get a chance to quickly enter new trends and make a profit.