Market Structure vs Price Action Patterns
Market Structure Vs Price Action Patterns : All patterns are NOT created equally. Even the highest probability patterns fail within the wrong conditions.
There are price action patterns proven to have trading edge.
However the patterns do not have the same probability of success at all times and
positions in the market.
The Success of the Price Pattern depends on its position within the structure of the market.
The position of the The Price Pattern within the Structure of the Market increases
or decreases its probability of success.
The Red Arrow marks a famous price pattern called the Pullback Pattern.
The pullback pattern has a proven trading edge.
However this one is not positioned correctly.
This pullback pattern on BINANCE:BTCUSDT is going AGAINST the Structure of the Market.
Which means it will have to have a lot of power to overcome the NEXT hurdle.
Which in this case is the Previous and Current Levels to the left.
These price levels are components of the structure everyone calls the Trading Range.
The Market Structure Remains the Same over a longer period of time.
Price Action patterns don’t change in its nature but they appear, succeed or fail, disappear and re-appear.
It is the traders job to see where is the pattern within the structure of the market to maximise their win rate and success rate.
e.g. NASDA100 Index had a pullback within a Trending Market. It had a higher probability of success.