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Lesson 2: Market
REKT P RO O
F
Structure
EDUC AT I O
N
Lesso Lessons
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/ RektProof Course Lessons 1-5
Video
Lesso Price Structures via Orderflow
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Exams
ACCO U N T Market Structure
My
What is market structure and the
Accou
importance:
nt
My
Notes Market structure gives you a dialogue when
reading the market. When you follow
My
market structure you can easily determine
Trade
Journa the flow of the market and place trades
ls based on the trend direction. Market
structure forms and gives you an idea when
Log
out the market comes to a stop and starts a
directional trend.
Reading market structure gives you an idea
of which way price will flow and you can “trade the
trend”
Chart Diagram:
A) Market Range
A market ranges prior to starting a directional trend.
A market will range and the directional trend is based off
order flow conditions (will cover in a later lesson) When a
market comes off an accumulation phase it’s always
followed by an uptrend, when a market comes off a
distribution phase it's always followed by a downward
trend.
In the example below the market is in a well defined
range with a swing high and swing low on each side on a
high time frame (weekly)
The market goes from a trending to a ranging
environment and from ranging to a trending
environment. When a market ranges its either
accumulating before it starts a trend up or distributing
before it starts a trend down.
B) Market Structure
1. In order for price to continue an upward trend it needs
to make a higher high meaning it would need to break
and close outside the high to the left. Price fails to make
a higher high and instead proceeds lower.
2. Price comes into the low of the range and failed to
make a higher low but rather closed outside the low on
the left. At this point market structure has been broken
and a possible market structure shift is in play.
3. Price comes back to the mid level of the range and
struggles to trade above and instead makes a lower
high. More indication that a shift in market structure will
occur.
C) Market Structure Shift
1. Series of lower highs and lower lows start to form. The
market is in a clear downtrend and every time a swing
low is made is when you should look for short
opportunities and zoom into well defined levels. You can
use levels such as weekly opens-monthly opens- daily
opens to give you an ideal entry in regards to the
directional trend.
2. Good example of an ideal entry revolved around
directional market structure. Price raids a previous swing
high prior to continuing downward trend.
3. Downtrend continuation- market continues after
presenting a trading environment.
D) Use Case Scenario
Using the example from above in greater detail:
1. Swing high forms (Lower High). Using our lower high
as our swing high we mark out the level and we take
note that price has come into it.
2. Swing High Swept Zooming into a time frame that
gives us more information we can see that price has
swept/deviated the lower high in an attempt to break
market structure to the upside. After engineering
liquidity by running the previous swing high (lower high)
we can assume based off the directional trend that the
market will continue downward after failing to shift
market structure to the upside.
3. After price previously swept the swing high we get a
third drive in which the risk reward supports shorts since
the trend is downward and price has swept a previous
high.
4. Setup: Entry: After price sweeps you would enter on
the third tap. If bearish there would be no need to run
the same high twice. I'll elaborate more when i go over
ranges. Stop loss would be placed above last recent
high. Target would be the last lower low prior to make a
lower high. Easy 23R setup +
