Break Of Structure Trading Strategy

Trading using a break of structure is a popular strategy among traders. The basic idea is to wait for a price to break through a key support or resistance level, which signifies a break of the current market structure. Once the break occurs, traders can enter a position in the direction of the breakout.

Here are the steps to trade using break of structure:

1. Identify the key support or resistance level that the price is currently testing. This could be a trendline, a moving average, a price level or a chart pattern.

2. Wait for the price to break through the support or resistance level. When the price breaks through, it signifies a break of the current market structure.

3. Confirm the break with indicators or price action analysis. This step helps traders avoid false breakouts that could lead to losses.

4. Enter a position in the direction of the breakout. For example, if the price breaks through a resistance level, traders can buy the asset in anticipation of further upward momentum.