I used to bleed money in the marketsโuntil I refined my approach to three essential trading concepts: market structure, price action, and liquidity. Master these, and you'll trade with precision. Hereโs how:
1. Market Structure: The Foundation of Every Trade
There are only three types of market conditions:
๐น Uptrend โ Higher Highs (HH) + Higher Lows (HL)
๐น Downtrend โ Lower Highs (LH) + Lower Lows (LL)
๐น Range/Consolidation โ Price bouncing between equal highs and lows
2. Spotting Trends with Clarity
โ Uptrend: HH + HL = Buyers in control
โ Downtrend: LH + LL = Sellers in control
โ Range: Equal highs and lows = Wait for breakout
3. Timeframes: See the Bigger Picture
๐ข Macro Trends โ (Daily, Weekly, Monthly) for overall direction
๐ต Micro Trends โ (4H, 1H, 30Min, 15Min, 5Min) for precise entries/exits
โ Pro Tip: Donโt tunnel vision on small timeframesโzoom out to avoid fakeouts and spot liquidity zones effectively.
4. BOS vs CHOCH: Spotting Trend Reversals Like a Pro
๐น BOS (Break of Structure): Confirms trend continuation
Bearish: Price breaks below the previous low Bullish: Price breaks above the previous high
๐น CHOCH (Change of Character): Signals a trend reversal
Occurs when price breaks the opposite structure (e.g., in a downtrend, price breaks a previous LH โ bullish shift)
5. Liquidity: The Smart Moneyโs Footprint
โ Identify key supply & demand zones
โ Wait for price to retraces into liquidity pockets
โ Enter in the direction of the new trend
๐ Stop-Loss: Below the demand zone (invalidates trade if broken)
๐ Take-Profit: When a counter-trend CHOCH appears
6. Key Takeaways for Smarter Trading
โ
Identify market structure & trends with confidence
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Understand price action and liquidity zones
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Use BOS & CHOCH for trend shifts
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Trade with the right timeframes
I wish I had focused on these principles from day oneโit would have saved me thousands. Now, I trade smarter. Hope this helps you do the same! ๐ก๐
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