Break of structure: how do you define it precisely?
"Structure broke" is the most-used phrase in trading communities and the least-defined. A break of structure means a new swing high or low — but on which time frame, with which candles, and what does it commit you to?
Define yours:
- the swing that counts for structure
- the time frame that governs
- what a break of structure triggers in your plan
The trend lines guide formalises swing structure.
Background: Trend lines and price channels: how to draw them and read a break
A trend line connects rising lows or falling highs. This guide covers drawing trend lines consistently, adding a channel line, and what a break does and doesn't tell you.
How many points do you need to draw a trend line?
Two swing points define the line. A third touch that holds gives it more weight, because it shows other traders are reacting to the same line.
Should trend lines use wicks or candle bodies?
Either can work, as long as you use the same method every time and don't redraw the line to fit each new candle.
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