Most drawdowns don’t happen because of a bad entry, but because the trader doesn’t understand what structure they’re in. I’ll break down how I read the market every day.

📈 Foundation: HH/HL and LH/LL

An uptrend is a sequence of higher highs (HH) and higher lows (HL). As long as this sequence holds, by default I look for a long from protected HLs and I don’t try to catch the top. A downtrend is the mirror image: LH and LL, and the logic is only to sell from resistance. First rule: trade in the direction of the current structure until it proves otherwise.

🔨 Break of structure (BOS)

BOS is the body closing beyond the last structural extreme that held the range. In the uptrend, it’s the close below the last meaningful HL. The key word is the close, not the wick. One dip under the low with an immediate return into the range is not a break—it's liquidity being taken: the market collects stops and moves on with the trend. That’s exactly where the crowd that shorts “on the breakout” loses money.

🔄 Trend change is a process

A reversal doesn’t happen with one candle. First, the impulse exhausts and price stops making new HHs. Then BOS comes down. And only when the first LH appears with confirmation do I acknowledge a change in market character. Until then, any drop for me is a correction candidate, not a reversal.

🧭 How I trade this

I don’t enter at the BOS itself. I wait for a retest of the broken zone: the former support must act as resistance. No retest and no reaction—no trade. Invalidation is always beyond a structural level, not “by feel”: if the level is lost, I exit with no arguments with the market. I calculate R:R BEFORE entry, minimum 1:2—otherwise the model isn’t interesting. Additionally, I watch funding and liquidity behavior: if the crowd piles massively into one side before the “breakout,” I increase caution.

In the $BTC simple framework: it holds the demand zone and prints a fresh HL — continuation scenario; it closes below the last HL and confirms an LH — I switch into reversal mode.

Structure doesn’t predict the future—it gives rules for how to react. That’s far more valuable than any forecast.

NFA, DYOR. You make the decisions. 🧠

#Bitcoin #BTC #Trading #MarketAnalysis #Crypto

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