Stop Trusting Every Break of Structure (Do This Instead) — Transcript

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1. 0:00So, you see price break this structure
2. 0:02here. You now see we have gone from a
3. 0:05downtrend into an uptrend. So, now you
4. 0:09may be looking for a long anywhere in
5. 0:10this area. Stop loss below this,
6. 0:12expecting price to take out maybe this
7. 0:15buy side liquidity up here. Let's see
8. 0:17what happens.
9. 0:19You get absolutely cooked. Don't worry,
10. 0:22this video is going to change that for
11. 0:23you. First thing you want to do is
12. 0:25ignore any small breaks of structure or
13. 0:28any small structure
14. 0:30in general. What the hell do you mean by
15. 0:33this, Adell? Well, when we're in a
16. 0:35downtrend, okay, we don't mark every
17. 0:38break of structure. So, let's say I was
18. 0:39marking my current trend. This would be
19. 0:43a break of structure. So, this would be
20. 0:45my protected high, and then price would
21. 0:47maybe pull back. This would be my
22. 0:51new low, and then we do this.
23. 0:54Okay? Now, what a lot of the beginners
24. 0:56do, they're going to mark this as a new
25. 0:58break of structure and move their
26. 1:00protected high to up here.
27. 1:03You cannot do this. Why can you not do
28. 1:05this? This is too small of a pullback.
29. 1:08When you have small pullbacks, you don't
30. 1:09count them as breaks of structure. This
31. 1:11here was a big pullback, so I will count
32. 1:14it as a break of structure. It gives me
33. 1:15a protected high. When I see this break,
34. 1:18I know that it's too small, and this is
35. 1:20not a real break of structure for me. If
36. 1:22that is not a real break break of
37. 1:24structure, this is not a protected high.
38. 1:27This is simply liquidity.
39. 1:29I can expect price to sweep this
40. 1:32and then put in a new low. Now, this
41. 1:35here is where you got faked. You thought
42. 1:36this was a real break of structure.
43. 1:39So, you thought that this was a real
44. 1:40change of character. You were looking
45. 1:41for buys, and price ends up dumping.
46. 1:44Okay? Now, as you can see, we had a new
47. 1:47low,
48. 1:50and we broke this low. Then I ask
49. 1:52myself, is this a big size break of
50. 1:54structure? Yes, because we had a big
51. 1:56pullback, and then we broke the low. So,
52. 1:58that is more likely for now to me to say
53. 2:01okay, this is my new protected high and
54. 2:04I can work with a new range. Now let's
55. 2:06say price creates another new big break
56. 2:08of structure. Perfect. This becomes my
57. 2:10new break of structure. This becomes my
58. 2:12new protected high. Now I'm working
59. 2:14within this range. Now let's say price
60. 2:16does that.
61. 2:17Small break of structure, what do we
62. 2:18see? We do not count this. This is
63. 2:21simply just building liquidity for the
64. 2:24higher zone for price
65. 2:27to do that.
66. 2:28Now let me show you a uptrend
67. 2:31example.
68. 2:32It's the exact same thing.
69. 2:34When we break highs with a decent
70. 2:36pullback, we have a high here. We broke
71. 2:39this with a decent pullback. That
72. 2:41becomes a real
73. 2:44break of structure, which means I can
74. 2:46put my low here. This
75. 2:49Okay, nice. A nice deep pullback. Real
76. 2:52break of structure.
77. 2:54My low becomes here. Then we do this.
78. 2:57Small break of structure.
79. 3:00And don't use this cuz now this is
80. 3:02simply liquidity, right? This red is
81. 3:04invalid. I'm not going to mark it like
82. 3:06this. This isn't a break structure. This
83. 3:09is just liquidity. We come back into
84. 3:11here. People start trading shorts. They
85. 3:14get it wrong.
86. 3:15And price pushes higher. So that's the
87. 3:18first step on how to use the real or the
88. 3:20correct break of structure. Let's go to
89. 3:22this chart example here. What do we have
90. 3:24here? You can see we had a low
91. 3:27and we broke structure. Okay? Now let's
92. 3:30look at the size of this pullback. Low
93. 3:32and let's just start from here.
94. 3:34Low.
95. 3:35Good size pullback.
96. 3:38Lower low. This works the same on any
97. 3:40chart, any timeframe because structure
98. 3:41is fractal, price is fractal. So the
99. 3:43same way I do it on a 1-minute will be
100. 3:44the same way that I do it on a 1-week or
101. 3:46the 1-day. This would be a valid break
102. 3:48structure because this gave me a big
103. 3:50pullback. So now this would be my
104. 3:52protected high.
105. 3:53Now let's see if anything changes.
106. 3:57This here, especially relative to the
107. 3:59prior pullback, relative to this, to
108. 4:02this, if we look at this pullback,
109. 4:05compared to this pullback, would you say
110. 4:07this is big or small? This is way too
111. 4:09small. So, I don't count this as a
112. 4:11breaker structure, remember?
113. 4:13I just keep my low to the new low. This
114. 4:15now just becomes potential what we said,
115. 4:17potential liquidity for price to sweep
116. 4:19and come
117. 4:21into here.
118. 4:22Let's see what we do.
119. 4:24Again, nothing's changed. None of our
120. 4:26external range are broken. Boom. We
121. 4:28sweep that exact same spot where at the
122. 4:30start of the video you might thought
123. 4:31this was a real breaker structure, real
124. 4:34protected high. We come back into this
125. 4:36area and you think, why isn't market
126. 4:39structure being respected? It is being
127. 4:40respected. Low, high, lower low, lower
128. 4:44high. This is a good size pullback. It's
129. 4:46come back. This would now be, right, my
130. 4:49new breaker structure. So, I would
131. 4:51simply move this to here.
132. 4:53My new protected high, my new
133. 4:57low, and look for the same
134. 5:01thing. Makes your life 10 times easier
135. 5:03and you're staying on the right side of
136. 5:05the chart, on the right side of price.
137. 5:07Let's look at this here.
138. 5:10Again, let's go back. Apologies. So,
139. 5:12when we're in an uptrend, what do we do?
140. 5:14We break highs. So, I'll mark that in
141. 5:17green for you. So, here we have a high
142. 5:21and we break
143. 5:22structure. All right, nice
144. 5:24to the high. This gives us a low here.
145. 5:27Again, is this decent size pullback?
146. 5:29Yes, high, pulled back, higher high.
147. 5:32Perfect. I can keep this as a breaker
148. 5:33structure. Gives me more confidence that
149. 5:35this is a real breaker structure and
150. 5:36this is my real low. Again, look at
151. 5:38this. Look at the size of this pullback,
152. 5:40all right,
153. 5:43and the size of this pullback.
154. 5:46That instantly tells me that I should
155. 5:47not mark this as a breaker structure,
156. 5:49okay? This is simply liquidity
157. 5:54for what? For my
158. 5:56zone below.
159. 5:58All right, this breaker structure here.
160. 6:00And we can come into that.
161. 6:03And people think downtrend, they start
162. 6:05looking for
163. 6:06but price is going to come back up.
164. 6:09Very choppy delivery, but it respects
165. 6:11structure. And that's what we need now.
166. 6:13If we
167. 6:14mark this
168. 6:16high we had
169. 6:18Of course, this is going to be a real
170. 6:19break of structure. Look at the size of
171. 6:20this pullback.
172. 6:22I'm more than happy to put this
173. 6:25as my low. And now I know that this is
174. 6:27real structure, I should look for longs
175. 6:29as long as this low here
176. 6:30is respected. The next step is
177. 6:34miti-
178. 6:35gation. You probably think what the hell
179. 6:37he
180. 6:39does that mean? And that just means how
181. 6:41much of the price are we using? So when
182. 6:42I'm marking real structure and fake
183. 6:43structure, I look at the size, that's my
184. 6:45number one, and then my number two is
185. 6:47the mitigation. I.e., when we create a
186. 6:49break of structure, a decent break
187. 6:51structure, a valid break of structure,
188. 6:52remember we said based on step one, not
189. 6:53the small break structure, i.e., this,
190. 6:56right? This becomes my area
191. 6:58where I'm looking for price to get
192. 6:59involved, okay?
193. 7:01Now
194. 7:0250% and more for me counts as mitigated.
195. 7:0550% and less counts as unmitigated. I'm
196. 7:08expecting price to return into this
197. 7:10area, okay, and push higher. Let's say
198. 7:13we return like this and we push higher.
199. 7:15Can you see we mitigated less than 50%?
200. 7:19Right, we didn't come into this 50%. So
201. 7:21that means price can come back into this
202. 7:2350% to gather these orders in order to
203. 7:25pick to in order to push higher. So now,
204. 7:27if I put this as my protected low, I
205. 7:30have to be a bit wary because I know
206. 7:32that we haven't returned to mitigate
207. 7:34this prior zone below. So if I'm using
208. 7:36this as my protected low, it can come
209. 7:37sweep, come back to 50%, and push
210. 7:40higher. So again, then I shouldn't mark
211. 7:41this as a break of structure, and
212. 7:43instead this is just fake, and I leave
213. 7:45it, and this becomes potential
214. 7:46liquidity. Whereas if we do something
215. 7:48like this
216. 7:52All right, let's say I'm debating if
217. 7:53this is a real break of structure or
218. 7:55not.
219. 7:57The first thing I can see is it's good
220. 7:58size, perfect. And if I draw the prior
221. 8:00zone, I only need to focus on the prior
222. 8:02zone, nothing below before that. We
223. 8:04came, we mitigated 50% or more, and we
224. 8:06pushed up. So based on step one, it's a
225. 8:08good size and step two, we mitigate this
226. 8:10prior zone, I am 100% certain that I am
227. 8:13100% confident that I can use this as my
228. 8:16protected low. Don't have to worry about
229. 8:18anything about there below there. If we
230. 8:20break this downtrend, I'm not going to
231. 8:22get faked out and if we respect this,
232. 8:23I'm still looking for
233. 8:26longs.
234. 8:27And this exact same thing with
235. 8:29a downtrend. So, the first thing we do
236. 8:32is look at the size of the zone. So,
237. 8:35let's say I say, "Okay, this is a good
238. 8:37size pullback. I can use this as my
239. 8:39potential protected high. Let me just
240. 8:41see how much of the prior zone we
241. 8:43mitigated." So, this prior low to high,
242. 8:45the prior breaker structure, never from
243. 8:48here to here. Too many people make the
244. 8:50mistake of drawing it from here to here.
245. 8:51No, it's always the prior breaker
246. 8:53structure. So, from this low to the high
247. 8:55it created.
248. 8:56Way below 50%, right? It's 30%. So, that
249. 8:59makes me worry. You know what? I don't
250. 9:00want to use this as my protected high
251. 9:02because we still have orders left here
252. 9:04to be filled.
253. 9:05Price can come
254. 9:08and then dump.
255. 9:10And now I have a big pullback, right? We
256. 9:12mitigated this prior zone. I can use
257. 9:14this
258. 9:16as my new breaker structure
259. 9:18and my new zone, confident that this
260. 9:21is my protected high. Again, let's go to
261. 9:24the charts and let's look at some
262. 9:27examples. Okay, now we have
263. 9:30two examples back-to-back on this gold
264. 9:31again. I want to say on any timeframe,
265. 9:32but let's just see. I believe this was
266. 9:34from literally Yeah, couple days ago.
267. 9:36So, we have a breaker structure here.
268. 9:39Right?
269. 9:40This is decent size and if I draw the
270. 9:42previous breaker structure,
271. 9:47I can see that we mitigated this area.
272. 9:49Look, way more than 50%. So, this is a
273. 9:51good size breaker structure,
274. 9:54right? And it mitigated the prior zone
275. 9:55way more than 50%. I'm very confident to
276. 9:57mark this as my current protected high.
277. 9:59Then we have another breaker structure
278. 10:00here or breaker structure. The first
279. 10:02thing that makes me concerned is look at
280. 10:04the size of this pullback and look at
281. 10:05the size of this pullback. This one is a
282. 10:07lot smaller than that one. So, that
283. 10:09tells me that, "You know what? This one
284. 10:11is likely to be fake. This one is likely
285. 10:14to be real. If I draw the prior zone,
286. 10:18well below 50% as well. Price has tapped
287. 10:20into price, tapped above about 30, then
288. 10:22it's tapped into 50. So, it's a small
289. 10:24breaker structure, and this area is
290. 10:26still invalid. I mean, unmitigated,
291. 10:28sorry. This for me, I'm not going to
292. 10:30mark a structure. I'm going to simply
293. 10:32mark as liquidity. And my range high is
294. 10:35from here, my range low is from here.
295. 10:37This is my structure right now. Low,
296. 10:39high, lower low. I'm looking for price
297. 10:42to sweep that, come into here,
298. 10:45and dump. Now, let's look at the same
299. 10:47thing again. New breaker structure.
300. 10:52New high.
301. 10:54Right, so
302. 10:55is this going to be a real breaker
303. 10:56structure or fake? Well, again, the
304. 10:58pullback size, look at this. Small, big.
305. 11:00That makes me convinced this real. Step
306. 11:02two, how much of the prior zone did we
307. 11:04mitigate? This wasn't the prior zone cuz
308. 11:06this was fake breaker structure. This
309. 11:08was my last breaker structure, we said.
310. 11:10So, this
311. 11:13is the zone I want to use. 70% well
312. 11:15below 50. So, big size pullback, and we
313. 11:17mitigate the prior zone. More than
314. 11:19confident to use this as my real breaker
315. 11:21structure.
316. 11:22What do we have here? Another small
317. 11:23breaker structure. So, based on that
318. 11:25size, look big, small. Less likely to
319. 11:28want to use this as my real breaker
320. 11:30structure.
321. 11:31>> [snorts]
322. 11:31>> Instead, I'm leaning towards using this
323. 11:33as liquidity. And now my range high is
324. 11:36from here to here. I don't include this.
325. 11:39And again, if I draw this zone,
326. 11:42well under 50%. So, even more reason
327. 11:44that this is going to be liquidity. We
328. 11:46are going to stop out people who think
329. 11:48that this is a real structure, come to
330. 11:50mitigate this zone. Same thing here,
331. 11:51right?
332. 11:52We have a breaker structure here.
333. 11:55Or a breaker structure.
334. 11:57But this is small.
335. 11:59Not big.
336. 12:00And this zone is still completely fresh.
337. 12:03This is my last breaker structure. So, I
338. 12:05check the last breaker structure zone.
339. 12:06If we created a new breaker structure
340. 12:07zone underneath this, I would use that
341. 12:09zone to check. But we established that
342. 12:10this isn't a real breaker structure. So,
343. 12:12this is my last breaker structure. I
344. 12:14don't need to go look anything left of
345. 12:15this.
346. 12:16And as we can see, this is still
347. 12:17unmitigated. So, this is just building
348. 12:19more liquidity, faking out more people.
349. 12:21They're going to be like, "Oh, look, we
350. 12:22took out one high. We took out two
351. 12:24highs.
352. 12:25This is definitely now an uptrend."
353. 12:27They're going to look for longs.
354. 12:29And we're going to look for shorts.
355. 12:31And as you can see,
356. 12:33we're going to be right. Now, again, we
357. 12:35mark this structure break.
358. 12:38Look at this size. Beautiful size. Pull
359. 12:41back before breaker structure.
360. 12:44And we mitigated this prior zone, if I
361. 12:47draw it properly.
362. 12:4850% exactly. Of course, that fits both
363. 12:51criteria. I'm going to draw this as a
364. 12:53new
365. 12:54protected high. Can you see how I see
366. 12:56structure differently and how it
367. 12:57actually works? Let's see this another
368. 12:59example, CL.
369. 13:02We broke structure to the upside here.
370. 13:06Is this a good size zone?
371. 13:09Yes. All right. And then we broke
372. 13:11structure here as well. So, I'll focus
373. 13:12on the most recent, cuz that's what
374. 13:13we're going to do. Focus on the most
375. 13:14recent break structure. So, break
376. 13:16structure here. Is this a good size
377. 13:18pullback? Yes, look, higher low, higher
378. 13:20low, high. It's decent size. It's
379. 13:22relative to the previous ones. It makes
380. 13:24sense. How much of this previous zone
381. 13:26did we mitigate? So, what was the break
382. 13:27structure before this? The last real
383. 13:28breaker structure before this
384. 13:30was here. And if I mark that area,
385. 13:33look at that. Mitigated 50% to the T.
386. 13:36So, decent size pullback. The prior zone
387. 13:38was mitigated 50% or more. Guess what?
388. 13:41I'm going to mark this as a real breaker
389. 13:43structure. I'm going to put my protected
390. 13:45low here, and I have a new range, and
391. 13:47I'm confident to take longs as long as
392. 13:49this holds. And if we break, I'm
393. 13:50confident that that is a real change of
394. 13:52character, and not fake. Generally, I
395. 13:54wish someone showed me this when I
396. 13:56started out, because this is exactly
397. 13:57what I used to get my bias, my range, my
398. 13:59liquidity, and it's made me a full-time
399. 14:00possible trader. So, if you want to be
400. 14:02able to watch me live stream this every
401. 14:03single day, then the link for that is in
402. 14:05the description for the premium Discord.
403. 14:06And if you want my help one-on-one,
404. 14:08where I will walk you through trading
405. 14:09until you become consistent and
406. 14:10profitable, the link for the one-on-one
407. 14:12mentorship is in the description below
408. 14:13as well. Apart from that, appreciate you
409. 14:15watching, appreciate any likes,
410. 14:16comments, subscribes.
411. 14:17Catch you in the next one.