Basic Market Structure you all need to know

Market structure can be seen as the different shapes or ways you can see the crypto market at any point in time. When the market moves, experts or traders give it a name and it is important to mention here that the market has three basic structures that it moves and in this post today, I will be explaining them one after the other.

The three different market structures we have are

• Bullish structure
• Bearish structure
• Consolidating structure

The market must always be among the above listed at any point and time and that is how traders know if they are to go long or short. It is also important to know them and what to do when in such a structure.

Bullish structure

This is the market structure in which the buyers dominate the market. Here the type of candle s Pip 0ticks you will always see is the green candlestick. In this structure, the candles always move in an upward direction which is an uptrend.

Those who wish to buy start buying when the bullish movement kickstarts or when the first green candle retest and then picks back. It is always recommended that traders long from the bottom because before you get to the top, you may have made your money and move out from the market.

Bearish Structure

The bearish structure is the direct opposite of the bullish structure as I have explained above. Here in this type of market, the sellers dominate the market and thereby give directions to the flow of the market.

In this case, the market always moves in a downward direction and that is what we call the downtrend movement of the asset. Here those who wish to sell start selling from the top down to the bottom. It is always recommended that you short at the top. From the top, as the trade keeps going down, you collect all your profit and move out of the market.

Consolidating structure

In this type of market structure, it is neither bullish nor bearish it is called the consolidating or range market. What happens here is that the market moves within a certain range up and down and is held at the top by resistance and at the bottom by support.

Here in this category, we notice that neither the buyers nor the sellers are in complete control of the market. Traders here are expected to wait for a break out which will determine if the market will either go up or come down.

A breakout determines the direction of the trade. It is important to mention here that it is not recommended to trade in the range phase because the market can kick you out if you don't have good knowledge of when to make your trade. It is important to mention here that when the trade breaks out in the upper section, a buy pressure will set in but if it breaks down in the lower section, a sell pressure will set in.

Conclusion

Knowing these market structures gives you an edge in the market as you will be able to trade following the trend instead of trading against the trend. With this, you will be able to make a lot of profit in your trading carer. I do hope this little piece helps us to understand a few tips about crypto trading. I will continue to share with us more facts about crypto trading as time passes by. See you all next time.