Market Structure Trading Explained: How to Read Trends Using BOS, BMS, SMS and Price Action
Market structure explains how trends form by studying price highs and lows, not indicators. An uptrend shows higher highs and higher lows, a downtrend shows lower lows and lower highs, and sideways markets rotate without direction. A Break of Structure (BOS) signals change but is not a trade by itself. Break in Market Structure (BIMS) includes a fakeout and liquidity sweep, making it higher probability. Shift in Market Structure (SMS) changes gradually and needs two breaks, but has lower probability. Reading structure near current price helps traders identify trend direction, avoid traps, and trade with better probability using price action.
Fair Value Gap Explained: What It Is and How Traders Use It in Real Markets
A fair value gap explains why price sometimes moves fast and later returns to the same area. It forms when price moves aggressively and skips proper order execution, creating an imbalance between buyers and sellers. This imbalance usually appears in a three-candle structure where the first and third candles do not overlap. Traders use this concept to understand where price is likely to react instead of guessing random reversals. A fair value gap trading strategy focuses on waiting for price to retrace into the gap after an impulsive move and then looking for confirmation, rather than chasing price. This approach helps traders trade with structure, patience, and clarity in real markets.
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