User Guide: Market Structure Functionality in the Trading System

Market Structure helps you identify whether the market trend is bullish, bearish, or sideways by analyzing swing highs and swing lows.

Simply put:

• Price keeps making higher highs + higher lows → the market is in an Uptrend.

• Price keeps making lower highs + lower lows → the market is in a Downtrend.

• Not clear / inconsistent → the market is Ranging.

In addition, the module detects two important events:

• BOS (Break of Structure): Price breaks the structure in the current direction → the trend continues.​

• CHoCH (Change of Character): Price breaks the structure against the current direction → the trend may reverse.

• ​

How to enable Market Structure

Market Structure is built into these indicators: Mirage, PinBar, InvertedHammer (and the Template). When you attach the indicator to the chart, Market Structure runs automatically — no extra installation is required.

To adjust parameters: right-click the indicator → Properties (or press F7) → find the parameter groups whose names start with "Fractal", "ATR", "Show Swing"...

---

Input parameters explained

1. Timeframe — Analysis timeframe

When changing it:

• Choose a higher timeframe (e.g., H4 on an M15 chart) → more “big picture”, less noise, but signals are more delayed.

• Keep Current → reacts faster to price changes, but can be noisy on small timeframes.

Tip: If you trade on M15, try setting Timeframe = H1 to view higher-timeframe structure and confirm the main trend.

---

2. Fractal Bars — Fractal width (candles on both sides of a swing)

When changing it:

• 0 (AutoTune) → the indicator automatically selects an optimal value (typically 2 to 4) for most cases.

• Increase (3, 4, 5...) → detects only larger, clearer swings → fewer signals but higher quality.

• Decrease (1, 2) → detects smaller swings → more signals but more noise.

Tip: Keep 0 (AutoTune) in most cases. Only increase to 3–5 if you trade swing/position and want to filter smaller swings.

---

3. ATR Period — ATR lookback used for swing filtering

When changing it:

• Increase (20, 50...) → smoother ATR, reflects longer-term range → stable filtering but slower adaptation.

• Decrease (5, 7...) → more sensitive ATR → adapts faster but can fluctuate more.

Tip: 14 (default) fits most pairs and timeframes. You typically don’t need to change it unless you trade very small timeframes (M1/M5 → consider 7–10).

---

4. Min Swing ATR — Minimum swing size (ATR multiplier)

When changing it:

• 0.0 (AutoTune) → the indicator analyzes data and selects an optimal threshold (recommended).

• Increase (0.8, 1.0, 1.5...) → keeps only large swings → fewer swings but more meaningful.

• Decrease (0.3, 0.5...) → keeps small swings too → more swings, more sensitive to short-term movement.

Example: ATR = 50 pips, Min Swing ATR = 1.0 → swing amplitude must be ≥ 50 pips to be shown.

Tip: Keep 0.0 (AutoTune). If your chart shows too many small swings, try increasing to 0.5–1.0.

---

5. Display parameter group (Show/Hide)

---

6. CHoCH Confirm Bars — Number of candles to confirm reversal

When changing it:

• 1 (instant) → CHoCH is confirmed as soon as 1 candle closes beyond → fast but more false signals.

• 2 (default) → needs 2 closes → balanced speed and reliability.

• 3–5 → needs more confirmation → very reliable but more delayed.

Real example: In an uptrend, price breaks below the latest low. If CHoCH Confirm = 2, the indicator waits for one more candle close below that low, then prints “CHoCH ▼” (potential bearish reversal).

Tip: 2 works for most cases. If you scalp on M1–M5, you may use 1 . If you swing trade on H4–D1, use 2–3 .

---

7. CHoCH Min Break — Minimum break distance for CHoCH

When changing it:

• 0.0 (off) → no minimum distance required → more sensitive.

• Increase (0.1, 0.3, 0.5...) → requires a stronger break → fewer fake CHoCH, but slower.

Example: ATR = 50 pips, CHoCH Min Break = 0.3 → price must break at least 15 pips (0.3 × 50) beyond the old swing level to count as CHoCH.

Tip: Keep 0.0 if you already use CHoCH Confirm Bars = 2 or higher (stacking filters can make signals too delayed). Enable it only if you want an extra filter in very noisy markets.

---

Reading signals on the chart

Swing markers (dots)

• Dot above a candle = Swing High

• Dot below a candle = Swing Low

• Blue = swing in bullish direction

• Orange/Red = swing in bearish direction

• Gray = the latest swing (not enough data yet for comparison)

HH / HL / LH / LL labels (swing labels)

• Dotted lines connect highs to highs, and lows to lows

• Blue = bullish direction (HH or HL)

• Orange/Red = bearish direction (LH or LL)

• 
  

BOS / CHoCH labels

• Horizontal line extends from the broken swing point to the breakout candle

• BOS: solid line, thinner

• CHoCH: dashed line, thicker (because it is more important)

Critical levels

• Dash-dot line extends to the current candle

• BOS level: if price breaks this level → trend continuation

• CHoCH level: if price breaks this level → potential reversal

Status panel (top-left corner)

• Line 1: ▲ UPTREND , ▼ DOWNTREND , or ◆ RANGING + last event (BOS/CHoCH)

• Line 2: the specific BOS and CHoCH price levels

• 
  

---

Trading scenarios (examples)

Scenario 1: Confirm a Buy entry in an uptrend

• Chart shows ▲ UPTREND | BOS → uptrend is confirmed

• Latest labels are HH (higher high) + HL (higher low)

• Price pulls back to the latest HL zone → potential Buy area

• Combine with a pattern signal  at the HL zone → enter Buy

• Place stop loss below the newly formed HL low

Scenario 2: Reversal warning — avoid entering

• Market is in ▲ UPTREND , and a CHoCH ▼ label appears (pink/purple)

• This warns the uptrend may be ending

• You should not open new Buy trades at this moment

• Wait for further confirmation: if a BOS ▼ appears afterward → downtrend is confirmed → look for Sell opportunities

• 
  

Scenario 3: Sideways market

• Status shows ◆ RANGING

• Swing labels alternate inconsistently: HH then LL, etc.

• Best approach: avoid trading, or trade within the range only (buy low, sell high) with small targets

---

Practical tips

Noise filtering

• Avoid trading against structure: If Market Structure shows UPTREND + BOS ▲ → prioritize Buy, reduce Sell trades.

• Wait for BOS confirmation after CHoCH: CHoCH is only an “early sign” of reversal; wait for BOS in the new direction before trading the reversal direction.

• Avoid major news sessions: unusually strong volatility can create fake CHoCH. During NFP, FOMC, etc., avoid relying on structure for decisions.

• Use a higher timeframe to confirm: If H1 is UPTREND but H4 is DOWNTREND → prioritize H4 (higher timeframe is usually more reliable).

Risk management

• CHoCH is not an immediate reversal trade: It’s an early warning; don’t rush to Sell when you see CHoCH ▼ without extra confirmation.

• BOS on a small timeframe can be noise on a higher timeframe: A BOS ▲ on M5 may be only a small fluctuation inside an H1 downtrend.

• Signals are delayed by design: Because it needs candle-close confirmation (Confirm Bars), signals always appear after the event. This is intentional to reduce false signals — not a bug.

• Always combine with patterns: Market Structure tells you the direction, patterns (Fakey, PinBar, Inverted Hammer) tell you the entry point. Using both is more effective than using either alone.

---

Optimize by trading style

Quick summary