Market Structure

The Market Structure indicator automatically identifies and categorizes short-term, intermediate-term, and long-term price pivots to help traders visualize hierarchical market shifts. This tool aims to simplify the recognition of complex price action patterns by highlighting significant swing points that often serve as institutional reference levels or reversal zones.

Usage

The Market Structure tool can be used to identify key pivot points across different time horizons. By observing the hierarchy of highs and lows, traders can better understand the current trend direction and potential areas for trend exhaustion or continuation.

• Short Term Highs/Lows (STH/STL): These are standard swing points where a high is higher than the bars on its immediate left and right (or a low is lower than the bars on its immediate left and right). They represent minor price fluctuations.
• Intermediate Term Highs/Lows (ITH/ITL): These points are identified based on the relationship between short-term swing points. For example, an ITH is a Short Term High that is higher than the Short Term Highs immediately preceding and following it.
• Long Term Highs/Lows (LTH/LTL): These represent major structural pivot points. An LTH is an Intermediate Term High flanked by two lower Intermediate Term Highs, suggesting a potential significant shift in the market's long-term direction.

Details

The script executes a recursive logic to filter price action. It first identifies base swing points (Short Term). It then evaluates these points to find "swings of swings," which form the Intermediate Term structure. Finally, it applies the same logic to the Intermediate points to derive Long Term structure. This hierarchical approach is a common technique in technical analysis to filter market noise and focus on higher-probability reversal zones.

Settings

Visibility and Aesthetics

• Short Term: Toggle the visibility of Short Term Highs and Lows.
• ST Color: Set the color for Short Term pivot labels.
• Intermediate Term: Toggle the visibility of Intermediate Term Highs and Lows.
• IT Color: Set the color for Intermediate Term pivot labels.
• Long Term: Toggle the visibility of Long Term Highs and Lows.
• LT Color: Set the color for Long Term pivot labels.

FAQ

How do I use the Market Structure labels for trading?

The labels identify historical pivot points. Traders often look for "breaks" in these structures (Market Structure Shifts) or use Long Term Highs/Lows as targets or stop-loss references.

Are there alerts included?

Yes, the script includes built-in alerts for every level of market structure (Short, Intermediate, and Long Term) that trigger upon the confirmation of a new pivot point.

How can I access Market Structure?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.