Market Structure – This is What Determines if You Win or Lose in Trading.

Visit Website.
New to Olymp Trade?
Important!
Review
REGISTER
1 Best Brokers in 2019
  • Register on the platform
  • Complete the interactive tutorial
  • Choose one of the strategies
  • Practice using a demo account
  • Make a deposit and become an expert
Earn real money with your phone.

What is Market Structure?

Market structure is how the asset market always appears, regardless of the dynamism and changes that markets undergo.

You must have heard that the market is dynamic and keeps on changing every other time.

However, there is a template of the market that always remains intact. And this is what we call market structure.

So this unchanging template of the market, is what you need to play around with if you will win in trading.

If you fail to play around with the structure well, then you will definitely lose your money in trading.

Visit Website.
New to Olymp Trade?
Important!
Review
REGISTER
1 Best Brokers in 2019
  • Register on the platform
  • Complete the interactive tutorial
  • Choose one of the strategies
  • Practice using a demo account
  • Make a deposit and become an expert
Earn real money with your phone.

The market structure comprises four stages namely:

  • The Accumulation Stage.
  • The Advancing Stage.
  • The Distribution Stage.
  • The Declining Stage.

You must understand the perfect trading techniques to navigate each stage lest you lose money trading.

Conditions are not the same in each stage and so you should know how to establish the stage a market is in, then pay attention to what happens there.

If you understand all this, you can trade each stage to emerge profitable in your everyday trading.

In this post, I will walk you through the various stages of the market structure.

I will also show you how each stage determines if you win or while trading in Olymp Trade.

Visit Website.
New to Olymp Trade?
Important!
Review
REGISTER
1 Best Brokers in 2019
  • Register on the platform
  • Complete the interactive tutorial
  • Choose one of the strategies
  • Practice using a demo account
  • Make a deposit and become an expert
Earn real money with your phone.

Here we go:

  1. The Accumulation Stage.

This stage of the market structure occurs after prices have been falling.

Here, prices are consolidating or ranging after a downtrend.

Basically, this is a price consolidation after a downtrend.

How do you identify that a market is in the accumulation stage?

By spotting a price range preceded by a long price fall.

Here, you will observe almost an equal number and sizes of bullish and bearish candlesticks.

Visit Website.
New to Olymp Trade?
Important!
Review
REGISTER
1 Best Brokers in 2019
  • Register on the platform
  • Complete the interactive tutorial
  • Choose one of the strategies
  • Practice using a demo account
  • Make a deposit and become an expert
Earn real money with your phone.

If you had applied any moving averages, they will be horizontal and the price will be moving up and down about them.

In the accumulation stage, bulls and bears are in a state of equilibrium and therefore the price is ranging.

What all that means is the volatility, at this stage, is low.

Prices are not changing rapidly in a definite direction but ranging within a constriction and that means low volatility.

How does this stage determine if you win or lose?

After establishing that the market is in an accumulation stage, then what that tells you is that you should trade the range until it is broken, after which you can trade the breakout.

After the breakout, if you continue trading downtrend related strategies, you will lose money.

Accumulation stage

  1. The Advancing Stage.

After the accumulation stage, what is expected is that the price will reverse from the initial downtrend into an uptrend.

For that reason, the price is meant to break out of the accumulation range upwards above the upper limit as seen in the image above.

The upward breakout is especially more probable when the lower limit of the accumulation stage range coincides with another support.

This other stronger support should be identified on a timeframe higher than the timeframe you are observing the charts on.

Well, whatever the case, the price has broken the accumulation range upwards and is now advancing upwards.

You will identify a market on the advancing stage by first spotting the accumulation stage preceded by a downtrend.

If there is no accumulation stage first, then what you are seeing might not be the advancing stage.

Here, the market is advancing upwards.

If you had applied any moving averages, they will be pointing upwards and the price trading above them.

You will also observe more and longer bullish than bearish candlesticks, as the price forms higher highs and lows progressively.

Market volatility at this stage is high.

Prices are changing rapidly upwards.

If you trade upwards you will become highly profitable.

This stage determines if you win or lose money trading.

First, identify the accumulation stage.

Afterward, you can anticipate trading the upward breakout from the accumulation stage.

However, if the breakout left you behind, you can trade pullbacks because the price is in a healthy uptrend.

Where the price is in a strong uptrend, you can trade breakouts above previous swing highs and still emerge profitable.

The advancing stage. Trade the Trend

  1. The Distribution Stage.

This stage of the market structure occurs after prices have been rising.

Here, prices are consolidating or ranging after an uptrend.

Visit Website.
New to Olymp Trade?
Important!
Review
REGISTER
1 Best Brokers in 2019
  • Register on the platform
  • Complete the interactive tutorial
  • Choose one of the strategies
  • Practice using a demo account
  • Make a deposit and become an expert
Earn real money with your phone.

Basically, this is a price consolidation after an uptrend.

How do you identify that a market is in the distribution stage?

By spotting a price range succeeded by a long price rise (advancing stage).

Here, you will observe almost an equal number and sizes of bullish and bearish candlesticks.

If you had applied any moving averages, they will be horizontal and the price will be moving up and down about them.

Bulls and bears are in a state of equilibrium and therefore the price is ranging.

Visit Website.
New to Olymp Trade?
Important!
Review
REGISTER
1 Best Brokers in 2019
  • Register on the platform
  • Complete the interactive tutorial
  • Choose one of the strategies
  • Practice using a demo account
  • Make a deposit and become an expert
Earn real money with your phone.

In matters volatility, at this stage, it is low.

Prices are not changing rapidly in a definite direction but ranging within a constriction and that means low volatility.

How does this stage determine if you win or lose in Olymp Trade?

After establishing that the market is in a distribution stage, then you should trade the range until it is broken, after which you can trade the breakout.

Until the market breaks out, don’t continue trading uptrend related strategies, you will lose money.

Distribution stage

  1. The Declining Stage.

After the distribution stage, what is expected is that the price will reverse from the initial uptrend into a downtrend.

For that reason, the price is meant to break out of the distribution stage downwards below the lower limit.

The downward breakout is especially more probable when the upper limit of the distribution stage range coincides with another resistance.

This other stronger resistance should be identified on a timeframe higher than the timeframe you are observing the charts on.

Whatever happens, the price has broken the distribution range downwards and is now declining downwards.

You will identify a market on the declining stage by first spotting the distribution stage preceded by an uptrend.

If there is no distribution stage first, then what you are seeing might not be the declining stage.

Note: – on the declining stage, the market is declining downwards.

If you had applied any moving averages, they will be pointing downwards and the price will trade below them.

Also Read: – HOW TO BACK TEST YOUR STRATEGY BEFORE YOU USE IT ON A LIVE ACCOUNT.

You will also observe more and longer bearish than bullish candlesticks, as the price forms lower highs and lows progressively.

Market volatility at this stage is high.

Prices are changing rapidly downwards.

Place downward trades for high profitability.

This stage determines if you win or lose on a downtrend so first identify the stage of the market.

Once you know how to identify it, you can anticipate trading the downward breakout from the distribution stage.

However, if the breakout leaves you behind, you can trade pullbacks because the price is in a healthy downtrend.

Final Thoughts on Market Structure.

Though dynamic and constantly changing, the asset market has an unchanging structure.

Knowledge of identifying and trading each component of the structure or lack of it, determine if you win or lose in Olymp Trade.

Happy Trading!


*Risk warning:

The information provided does not constitute a recommendation to carry out transactions. When using this information, you are solely responsible for your decisions and assume all risks associated with the financial result of such transactions.
 

Start Trading 

Related Posts


The CCI Divergence Trading Strategy

Top 5 CCI Trading Strategies for Olymp Trade.

What is CCI? CCI stands for Commodity Channel Index. The Commodity Channel Index (CCI) is a technical indicator that compares the current price of an asset to the average price over a given number of ....

Aroon Signal Threshold.

Top 5 Aroon Trading Strategies for Olymp Trade.

What is the Aroon? Aroon is a technical indicator that shows trend changes in the price of an asset and the strength of the trend. It also gives bullish and bearish entry signals. In matters ....

The DeMarker-Price Action Strategy

Top 5 DeMarker Trading Strategies for Olymp Trade.

What is DeMarker? The DeMarker is a technical oscillator that measures the demand of an asset, usually abbreviated as DeM. It works by comparing the most recent high and low prices to the previous high ....

Bearish Signal confirmation

Top 5 MACD Trading Strategies for Olymp Trade.

What is MACD? Are you new to trading and are wondering what MACD is? MACD stands for the Moving Convergence Divergence. It is one of those trading tools that technical analysis traders use to identify ....

Stochastic-Channel Trading Strategy.

Top 5 Stochastic Trading Strategies for Olymp Trade.

What is Stochastic? Did you just begin your journey in trading, tried to flip open that trading platform, found the stochastic indicator, and are wondering what sort of thing Stochastic is? Stochastic is an oscillator ....

Bearish Harami reversal candlestick pattern

How to Trade the Harami Reversal Candlestick Pattern in 2021.

What is the Harami Reversal Candlestick Pattern? The Harami reversal candlestick pattern is a two-candlestick trend reversal setup. Harami in Japanese means ‘pregnant’. It takes this name because it resembles an expectant mother. The pattern ....

Runaway Gaps

How to Trade Runaway Gaps in Olymp Trade.

What are Market Gaps? Market gaps are areas where the price skipped and did not trade. A market trading upwards may skip an area on the chart and the next candlestick opens higher than the ....

Observe Price Swings.

How to Identify a Trending Market without Indicators.

What is a Trending Market? A trending market is one whose price shows sustained momentum towards a particular direction. If the price shows sustained momentum upwards, then the market is trending upwards. However, if the ....

Is $100 Enough to Start Trading Forex?

Is $100 Enough to Start Trading Forex?

If you are new to Forex and Fixed Time Trading then chances are you have wondered how much you need to start trading. Should you start with the minimum amount brokers allow as a minimum ....

Inside bar trading strategy

How to Make Money Trading the Inside Bar Strategy.

What is the Inside Bar? The Inside Bar is a candlestick whose whole dimension is contained within the dimension of a previous candlestick. It is a candlestick pattern that comprises first the mother candlestick, then ....

Pullback Trading

How to Trade Pullbacks in Olymp Trade like a Pro.

What are Pullbacks? To trade pullbacks on Olymp Trade like a pro, you must first understand what pullbacks are. Pullbacks, also called retracements, are periods of price correction before the primary trend resumes. The price ....

7 Best Trading Strategies for Volatile Markets.

7 Best Trading Strategies for Volatile Markets.

Volatile Markets are those markets where the price rises and falls rapidly and sharply. That means there are very fast and wide price fluctuations in the markets. Did you know that volatile markets present the ....

7 Best Trading Strategies for a Small Account.

7 Best Trading Strategies for a Small Account.

Do you have or intend to hold a small Forex or Fixed Time Trading Account? Are you wondering which strategies are suitable for a small account? Then you are in the right place. In today’s ....

7 Best Day Trading Strategies that Work.

7 Best Day Trading Strategies that Work.

If you are a day trader, you must be looking for day trading strategies that work. But your search from other sources must have always proven unfruitful. That might be the very reason you are ....

How to Make Money with Non-Directional Strategies

How to Make Money with Non-Directional Strategies

What are Non-Directional Strategies? Non-Directional Strategies are neutral strategies that are not based on the direction the market moves. Whether markets move up or move down, these strategies will generate profits. They are the complete ....

Forex Overlapping Fibonacci

Understanding the Forex Overlapping Fibonacci Trade Strategy

What is the Forex Overlapping Fibonacci Trade Strategy? The Forex Overlapping Fibonacci Trade Strategy is a forex trading strategy which utilizes the confluence of Fibonacci levels with other Fibonacci levels, support levels, resistance levels, pivot ....

Top fixed time trade strategies for Olymp Trade

Top Fixed Time Trade Strategies that Work in Olymp Trade

Top Fixed Time Trade Strategies that Work. Breakout Strategy. Gap Fill Strategy. Support and Resistance Strategy. Moving Average Strategy. 1. Breakout Strategy. This is one of the common forex trading strategies. Prices of assets move in ....

5 Best Trend Trading Strategies for Beginners.

5 Best Trend Trading Strategies for Beginners.

Did you just begin Forex Trading in Olymp Trade? Then chances are, you have traded with the naked eye, lost, and are now looking for best beginner forex trading strategies to improve your winnings.  And ....

Best Trading Strategies - How to Use Technical Indicators to Come up With Olymp Trade Trading Strategies.

5 Best Trading Strategies of 2020

Can I tell you one thing about trading strategies? They need continuous improvement. Market conditions are not rigid but fluctuate now and then. That calls for flexibility and adaptability on the part of the trader ....

Best Strategies for Olymp Trade FTT

7 Best Strategies for Olymp Trade FTT Trading

Imagine a captain sailing a ship without the compass direction and the map of the voyage, what do you think would happen?  Wouldn’t that be an aimless and almost impossible journey? Well, such is trading. ....

Read More
 
Visit Website.
New to Olymp Trade?
Important!
Review
REGISTER
1 Best Brokers in 2019
  • Register on the platform
  • Complete the interactive tutorial
  • Choose one of the strategies
  • Practice using a demo account
  • Make a deposit and become an expert
Earn real money with your phone.

Tagged With :

Comment on this post