Foundation
All instruments.Market Structure Shift (MSS / CHoCH)
In a downtrend price makes lower highs and lower lows. When a lower high is broken with a body close, structure has shifted. This is the confirmation that follows a sweep and precedes your entry. Also known as a change of character (CHoCH).
Why it works
A sweep tells you liquidity was taken. A structure shift tells you the market agreed.
Timeframes
5m for the shift, 1m for entry refinement.
Session
All.
The checklist
- 1A clear sequence of highs and lows exists.
- 2Price sweeps an extreme.
- 3The most recent counter-swing is broken with a body close, usually with displacement.
Execution
Entry
On the retracement into the gap left by the shift candle.
Stop
Beyond the swept extreme.
Target
Previous structure high/low.
When you should not take it
- Shifts inside a tight consolidation are noise, not signals.