Intermediate
What is complex structure?
Sometimes structure will not be as clean as it was in the previous section. Sometimes it can give us something that is a bit more complex. This is referred to as complex structure. In these situations, you will notice that there are multiple highs and lows that are hard to decipher which one is the structure high and structure low. Complex structure can come in the form of a complex retracement, complex continuation or both.
Complex structure rules
Bullish Complex Structure Rules
A structure higher low is not a structure higher low until it creates a new structure higher high. The structure higher low must come from the lowest point of the entire retracement move. bullish structure is not broken until a structure low is broken. Price breaking an internal low does not count as a break of structure.
Bearish Complex Structure Rules
A structure lower high is not a structure lower high until it creates a new structure lower low. The structure lower high must come from the highest point of the entire retracement move. Bearish structure is not broken until a structure high is broken. Price breaking an internal high does not count as a break of structure.
What Is Internal Structure?
Internal structure is any point that is not a structure high or structure low. these points will be within the immediate range of the structure low and structure high but will not produce a new structure point. Sometimes internal structure will be referred to as “noise”. The reason it is may be called noise is because all of the internal points of structure can be metaphorically loud and distract you from structure.
Internal Structure Rules
Internal Structure Rules With Bullish Structure
Any low point that does not create a structure higher high is an internal low. Any high point that is within the structure’s range is an internal high.
Internal Structure Rules With Bearish Structure
Any high point that does not create a structure lower low is an internal high. Any low point that is within the structure’s range is an internal low.
What is considered a valid pullback?
Bullish Structure
A valid pullback is anything that does not fall under any of the following categories. 1 bearish candlestick, consolidation or a condensed form of a bullish channel/compression.
Bearish Structure
A valid pullback is anything that does not fall under any of the following categories. 1 bullish candlestick, consolidation or a condensed form of a bearish channel/compression.
We have not gone over consolidation, channels or compression but we will soon in a couple of lessons so do not worry.
Why Is Complex structure Important?
It is important to understand because if you do not read it correctly, you may get confused in which structure price is in. sometimes you may think price is giving bearish structure but it is still in fact bullish structure and vice versa.
How To Spot Complex Structure
Complex structure can be spotted whenever there is an internal structure point involved. Complex structure can come in the form of complex retracements, complex continuations or both.
Complex Structure With A Complex Retracement
Bullish Complex Structure With A complex Retracement
Let’s take a look at an example with bullish structure. The first low that leads into a high is going to be the first structure’s range. Everything within these two points of structure is considered internal structure. The last internal lower low is created but this one does lead into a new structure higher high. Therefor, this internal lower low turns into a structure higher low. It is a structure higher low because it is higher than the previous structure low. This creates a new structure range. From here, you can see that price gave a complex retracement as it created multiple internal structure points during the pullback.
Bearish Complex Structure With A Complex Retracement
Let’s take a look at an example with bearish structure. The first high that leads into a low is going to be the first structure’s range. Everything within these two points of structure is considered internal structure. The last internal higher high is created but this one does lead into a new structure lower low. Therefor, this internal higher high turns into a structure lower high. It is a structure lower high because it is lower than the previous structure high. This creates a new structure range. From here, you can see that price gave a complex retracement as it created multiple internal structure points during the pullback.
Complex Structure With A Complex Continuation
Bullish complex Structure With A Complex Continuation
The first low that leads into a high is going to be the first structure’s range. Everything in between will be considered internal structure. Once price gets above the previous structure high, you can consider a new structure higher high. Now that you have a new structure high, you can back track and find structure low in which it came from. Since price gave internal highs and lows while creating a new structure high, this is considered a complex continuation leg of structure.
Bearish complex Structure With A Complex Continuation
The first high that leads into a low is going to be the first structure’s range. Everything in between will be considered internal structure. Once price gets below the previous structure low, you can consider a new structure lower low. Now that you have a new lower low, you can back track and find structure high in which it came from. Since price gave internal highs and lows while creating a new structure low this is considered a complex continuation leg of structure.
Complex Structure With A Complex Retracement And Continuation
Bullish Complex Structure With A Complex Retracement And Continuation
The first low that leads into a high is going to be the first structure’s range. Everything within these two points of structure is considered internal structure. Price creates man internal points but once price created a new structure high, you can go back and find the structure higher low by going to the lowest point of the entire retracement move. From here, you can see that price gave a complex retracement and complex retracement as it created multiple internal structure points for both moves.
Bearish complex Structure With A Complex Continuation
The first high that leads into a low is going to be the first structure’s range. Everything within these two points of structure is considered internal structure. Price creates man internal points but once price created a new structure low, you can go back and find the structure lower high by going to the highest point of the entire retracement move. From here, you can see that price gave a complex retracement and complex retracement as it created multiple internal structure points for both moves.
Expectation Vs Reality
A lot of retail traders do not know how to identify structure correctly. They will not know the difference between structure and internal structure.
In the following examples, you will be able to see how reading structure incorrectly will affect your perception of structure direction. Most of the time you, will have the expectation that structure was broken and going one direction but when in reality structure never broke. Remember to follow all of the rules or you may get lost in the true structure of the market as many other retail traders do.
complex structure from a bank perspective
Complex structure from a bank perspective is very similar to what you already know about structure. When you get a complex retracement or continuation, it is simply structure on a lower timeframe. this structure is formed as banks buy or sell the market to create the retracement or continuation leg of structure. Remember, the market moves in a fractal matter on all timeframes.
Bullish Complex Structure
If the market is in bullish structure, you may see a complex retracement. On the higher timeframe, it will most likely consist of internal lower highs and internal lower lows and almost appear as a downtrend. on the lower timeframe, it will most likely be bearish structure consisting of structure lower highs and structure lower lows. Banks are selling from a fractal perspective so the market can give the retracement move so they can eventually buy again. You may also see a complex continuation and almost appear as an uptrend. On the higher timeframe, it will most likely consist of internal higher lows and internal higher highs. On the lower timeframe, it will most likely be bullish structure consisting of structure higher lows and structure higher highs. Banks are buying from a fractal perspective so the market can give the continuation move.
complex structure from a bank perspective
Complex structure from a bank perspective is very similar to what you already know about structure. When you get a complex retracement or continuation, it is simply structure on a lower timeframe. this structure is formed as banks buy or sell the market to create the retracement or continuation leg of structure. Remember, the market moves in a fractal matter on all timeframes.
Bearish Complex Structure
If the market is in bearish structure, you may see a complex retracement. On the higher timeframe, it will most likely consist of internal higher highs and internal higher lows and almost appear as an uptrend. on the lower timeframe, it will most likely be bullish structure consisting of structure higher lows and structure higher highs. Banks are buying from a fractal perspective so the market can give the retracement move so they can eventually sell again. You may also see a complex continuation. On the higher timeframe, it will most likely consist of internal lower highs and internal lower lows and almost appear as a downtrend. On the lower timeframe, it will most likely be bearish structure consisting of structure lower highs and structure lower lows. Banks are selling from a fractal perspective so the market can give the continuation move.
Examples Of Complex Structure On the Charts
There are many variations to complex structure but here are a couple of examples you may see. Always make sure to follow the rules. If for some reason structure is hard to see, try to find a timeframe that looks the best to you.
bullish Complex Structure
You can see the structure higher lows and structure higher highs. Within them are some internal structure points. It is important to remember that a true structure higher low will be the lowest point of a retracement and leads into a structure higher high.
bearish Complex Structure
You can see the structure lower highs and structure lower lows. Within them are some internal structure points. It is important to remember that a true structure lower high will be the highest point of a retracement and leads into a structure higher high.
