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What Is a Change in Market Structure?

Sachin Yadav

Order flow becomes more useful when combined with market structure.

Market structure describes how price develops through swings, highs, lows, and trading ranges.

For example, a market making higher highs and higher lows may be showing an upward structure.

If price then breaks an important swing low, the previous pattern may be weakening.

Order flow can help examine the activity around that break, but it doesn't replace the structure itself.

I want to distinguish between a small fluctuation and a meaningful change in the market's behavior.

Defining structure objectively also makes backtesting easier because it reduces the temptation to reinterpret every chart after seeing what happened next.

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