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Market Structure (Breakers)

By LuxAlgoNov 7, 2023

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Market Structure (Breakers) keeps working after the break. Each time price confirms a break of structure by trading through a preceding swing level, the broken point is extended forward as a dotted line, a "Breaker Market Structure", inspired by breaker blocks, marking where price may find support or resistance on the way back.

How to Trade the Market Structure (Breakers)?

  • Trade the return: extended levels act as reference support and resistance; candles get green borders on support events and red borders on resistance events, so every test is visible.
  • Watch trend extremities: market structures at the extremes of a trend tend to produce breaker breakouts, often significant markers of possible reversals.
  • Use breakouts as exits: a breaker giving way makes a strategic exit point for trades opened on earlier market structures.
  • Read the clusters: several breaker structures forming together after a reversal points to the onset of a new trend.

How long a breaker stays relevant is up to you. Maximum Breaks sets how many times price must cut through before the structure counts as broken (with the setting at 3, a bearish breaker needs three dips below its level), while Breaker Maximum Duration retires structures that go unbroken for too many bars.

Market Structure (Breakers) Settings

  • Swings Period: swing detection period; higher values focus on long-term market structures.
  • Maximum Breaks: breaks required before a breaker is classified as broken; raising it highlights more breaker structures.
  • Breaker Maximum Duration: maximum lifespan in bars before an unbroken breaker is dropped from evaluation.

Frequently Asked Questions

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