📋 Video Summary

🎯 Overview

This video is day six of a trading boot camp, focusing on the concept of "Break of Structure" in the context of financial markets. The instructor, TJR, explains how to identify breaks in market trends and shifts in market structure, essential for understanding market direction and making informed trading decisions. The video also covers recognizing highs and lows.

📌 Main Topic

Break of Structure (BOS) - Understanding how to identify when a trend changes direction.

🔑 Key Points

• 1. Understanding Highs and Lows [0:00]

A high is defined as a move up followed by a move down (two candles).

A low is defined as a move down followed by a move up (two candles). The highest wick of the two candles represents the high, and the lowest wick represents the low.

• 2. Break of Structure Defined [1:24]

A break of structure is a shift in the trend.

In an uptrend (higher highs and higher lows), a break of structure occurs when the market closes below a previous low. In a downtrend (lower highs and lower lows), a break of structure occurs when the market closes above a previous high.

• 3. Break of Structure to the Upside [7:37]

Indicates a shift from a downtrend to an uptrend.

Requires a candle closure above a high (move up, then move down).

• 4. Break of Structure to the Downside [11:45]

Indicates a shift from an uptrend to a downtrend.

Requires a candle closure below a low (move down, then move up).

• 5. *What Break of Structure Isn't** [12:10]

A wick exceeding a high or low is not a break of structure.

A break of structure requires a full candle closure above/below the relevant level.

• 6. Step-by-Step Guide to Spotting Break of Structure [14:35]

Identify the Trend: Uptrend or downtrend.

Uptrend: Watch the lows. Downtrend: Watch the highs. Break of Structure (Downside): Close below the most recent low. Break of Structure (Upside): Close above the most recent high. Focus on the most recent highs/lows formed.

• 7. Importance of Candle Closure [26:32]

Emphasizes the need for the candle to close above/below the high/low to confirm the BOS.

Wicks can be misleading; focus on the body of the candle.

💡 Important Insights

• • Power of Timeframes [22:31]: The weekly timeframe holds more power than the daily, and the monthly holds more power than the weekly. A break of structure on a lower timeframe might be a retracement on a higher timeframe.
• • Liquidity Sweeps vs. BOS [23:58]: Wicks below a previous low can be "liquidity sweeps" that are not true breaks of structure.

📖 Notable Examples & Stories

• • GU Example [22:51]: Shows a daily break of structure to the downside, potentially a retracement on the weekly.

🎓 Key Takeaways

• 1. Understand the difference between a high/low and how many candles it takes to form.
• 2. Know the definition of a break of structure.
• 3. Focus on candle closures to confirm a break of structure, not just wicks.
• 4. Focus on the most recent highs and lows that are made.
• 5. Use a checklist to identify breaks of structure and avoid false signals.

✅ Action Items (if applicable)

□ Find 10 examples of confirmed breaks of structure in the market. □ Find 10 examples of what might look* like a break of structure (wick below a low, wick above a high), but is not.

🔍 Conclusion

The video provides a clear and concise explanation of break of structure, a critical concept for traders. By focusing on candle closures and understanding trend direction, traders can improve their ability to identify trend changes and make more informed trading decisions. The homework assignments are designed to solidify understanding and improve practical application.