Advanced market structure consists of analysing and identifying swing market structure and orderflow on multiple timeframes from the top down (meaning we start from the higher timeframes and move down to the lower timeframes where we execute our trades). 

If you’re not aware, this is part of a two part series, so if you haven’t already read our article or watched the video training on basic market structure, be sure to check that out first!

As a professional trader it’s your responsibility to understand how the market moves structurally and how each move is a phase in a particular part of that market structure. By combining market structure of multiple timeframes this will give you the ability to accurately predict where the market is most likely to go from both a swing and intraday perspective.

Luckily for you, we’re going to dive deep into how multi-timeframe structure works so you can utilise this important skill to gain clarity on how the market moves.

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Why Advanced Market Structure Is Important To Understand

So why bother learning advanced multi-timeframe structure you ask? Well, the answer is simple. While basic structure is great for understanding trends on a single timeframe, if you want to really build your skills as a professional trader, you’ll need to develop the ability to read multiple timeframes to understand where price is, and where it’s going, from the higher timeframes, down to the timeframe you execute on whether it’s the 15-minute or 1-minute chart.

Advanced Market Structure Works On Any Pair or Trading Instrument

The other good news is that market structure works on ANY pair or trading instrument. It doesn’t matter if you trade EURUSD, GBPUSD, a minor Forex pair, stocks, bonds, indices, or cryptocurrencies. Market structure is a core part of every tradable asset.

Why A Consistent & Mechanical Approach To Advanced Multi-Timeframe Market Structure Is Important

A consistent and mechanical approach to multi-timeframe market structure is important to your success as a trader because it’s one of the most critical parts of technical analysis that will not only give you the confidence in your trading, but also an understanding of the ebbs and flows of the market so you can capitalise on pro-trend and counter-trend moves in the market on any timeframe you choose to analyse and trade from.

How Understanding Advanced Market Structure Will Improve Your Trading

The first benefit to building your multi-timeframe analysis skill is that you’ll start to gain more clarity in your trading as you start to understand how the different timeframes move structurally, and how they interact with things like zones of supply and demand, and liquidity.

Secondly, you’ll stop getting lost in multi-timeframe market structure! If you don’t have a consistent way of approaching your market structure and technical analysis, chances are you are actually marking out invalid points of structure, which is causing you to mis-interpret what the market is doing.

Last but not least you’ll find that you’re going to be more accurate in your ability to call the direction of the market, and because of that you’ll be able to catch trades that move with the market, rather than taking losses because you’re trading against the market.

Advanced Market Structure

What Is Multi-Timeframe Market Structure?

Multi-timeframe market structure is taking all of the skills you’ve built learning basic market structure (trends, strong highs and lows, weak highs and lows, and internal structure/orderflow), and applying it to multiple timeframes to be able to accurately interpret what the market is most likely to do next. 

Determining multi-timeframe market structure consists of analysing different timeframes starting from the highest timeframe, down to the mid-timeframes, and finally onto the lower timeframes where you’ll actually look for trade ideas and execute on them based on your analysis.

Why Top-Down Market Structure & Analysis Is Important

Without top-down market structure and analysis, you simply won’t be seeing the whole picture, meaning that if you only do analysis on the 15-minute timeframe, you won’t know if you’re trading counter to the 4-hour or daily timeframes. While there is nothing wrong with trading counter-trend to the higher time frames, it does become a problem if you’re not aware of the higher-timeframe context and perspective. 

While we’re not saying it’s not impossible to be consistently profitable by trading just one timeframe, the lower the timeframe you’re on, the more manipulation will be going on, so at minimum you should be looking at two to three time frames to get an idea of what the longer term outlook is of the instrument(s) you’re trading

Impulsive vs Corrective Moves Are Trends on The Lower Timeframes 

Once you understand that the market tends to move in impulsive and corrective phases, you’ll notice that both types of moves are actually trends on lower time frames. 

For example, if the 4-Hour is bullish and up-trending (making higher highs and higher lows), an impulsive bullish move on the 4-Hour would be bullish (uptrending) market structure on the 15-minute. 

On the other hand, when the 4-Hour starts to make a bearish correction (pullback), there would be bearish (downtrending) market structure on the 15-minute.

This also applies to the higher-timeframe, where-in a 4-hour bullish trend could simply be a corrective pullback in a bearish trend (downtrending market structure) on the daily timeframe.

How Swing Structure Is Internal Structure on a Higher Timeframe

Just as we see impulses and corrections on one timeframe as trends on the lower timeframe, we can also view internal structure or changes of character on a higher timeframe such as the 4-hour as trends on the lower relative time frames like the 15-minute. 

This way we have two ways of looking at structure from a single timeframe, with the understanding that each move on one timeframe is just a significant move or trend on the lower timeframes.

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Trend Changes Always Start From The Lower Timeframe (Fractal Structure)

Remember, every change in trend no matter what the timeframe has to start from somewhere. All trend changes and shifts in market structure actually technically start from the first initial shift in 1 minute orderflow. 

Knowing this we also understand that each timeframe’s shift in orderflow then eventually turns into a structure break, which is an orderflow shift on a higher time frame, and the higher timeframe’s structure break is a shift in orderflow of an even higher time frame, and so on.

This illustrates the fact that all timeframes are interconnected, and what is a break of structure on one time frame is just an orderflow shift on another time frame, and vice versa. 

In the chart below we’ve listed how each time frame relates to the others surrounding it so you can get a sense of how to read structure and orderflow for multiple timeframes on a single timeframe. Understanding the relationship between how each time frame moves is super helpful for identifying where the market may likely go next based on its structure and orderflow.

How To Anticipate Market Direction With Multi-Timeframe Market Structure Analysis

Now that you understand how the markets move in respect to each timeframe, you can start to anticipate the market’s direction by using a multi-timeframe market structure. Again, remember that we always want to start with the higher timeframes and mark out structure, plus take note of the orderflow (internal structure) that the timeframe you’re on is developing.

In the example below you can see how we are in a bullish higher timeframe market (let’s pretend the black line is the 4-Hour chart), and we get an orderflow shift from bullish to bearish (internal structure break) on the 4-Hour timeframe which is a bearish swing structure break on the 15-Minute (MTF structure/blue line). 

We then see the 15-minute/MTF orderflow shift from bearish to bullish (which is a swing structure break on the 1-minute chart) telling us that we may potentially see this corrective 4-Hour / HTF pullback in a bullish HTF market start to expire and move toward taking the targeted weak high on the 4-hour. 

At this point on the 1-minute you can wait for a LTF orderflow shift (pretend the green line is the 1-minute chart after the shift in 15-minute orderflow to start looking for entries. This is just one of the many scenarios that can play out.

Expect The Unexpected

Finally, expect the unexpected to happen. Similar to the diagram above in the last example, we have a scenario in which the higher timeframe is bullish (in this case the daily timeframe in red), and based on that we are expecting the daily high is weak and will be taken once the pullback phase completes itself.

The difference however is that the market is actually compressing as the 4-Hour in black is bearish, the 15-minute in blue is making bullish corrective structure within that 4-Hour bearish leg, and finally we have the 1-minute chart in green moving within the last bullish structure range that the 15-minute has defined.

The point of this diagram is to illustrate that when we have multiple conflicting biases, while we want to give precedent to the highest timeframes, really anything can happen. It’s your job as a professional trader to adapt, re-adjust, and react to what happens in the market next, if things don’t pan out the way you expect them to. There is no telling how long this daily pullback in the example below may last, or if the daily structure will shift from bullish to bearish (perhaps because of a daily level of supply we’re reacting to to the left).

This is why it’s so important to do your due diligence when analysing structure on every timeframe, plus being aware of major levels of supply and demand, as well as pools of liquidity to the left.

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Robert Castillo – Currency & Commodities Trader,
Financial Analyst, Writer & Editor.

Robert is a funded trader based out of Toronto, Canada, and has been trading currencies, commodities, stocks, and cryptocurrencies for over 7 years. Outside of trading he enjoys producing music, mixed martial arts, and riding his motorcycle in the summer.