{"term":{"slug":"market-structure","term":"Market Structure","definition":"The pattern of higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend) that defines the current directional bias. A break of structure (BOS) occurs when price violates the most recent swing point, signaling a potential trend change.","extendedExplanation":"Market structure is the foundation of technical analysis in prop firm trading. It tells you the current trend direction and when the trend might be changing. In an uptrend, price makes higher highs (HH) and higher lows (HL). In a downtrend, it makes lower highs (LH) and lower lows (LL).\n\nA Break of Structure (BOS) occurs when price breaks above the most recent lower high (in a downtrend, signaling potential reversal to uptrend) or below the most recent higher low (in an uptrend, signaling potential reversal to downtrend). A Change of Character (CHOCH) is similar but represents the first break against the prevailing trend.\n\nFor prop firm traders, trading with market structure (in the direction of the trend) significantly improves win rate and risk-reward. Entering at higher lows in an uptrend or lower highs in a downtrend, with stop-losses beyond the structural level, provides defined risk and strong trend-following entries.","exampleWithNumbers":"EUR/USD 4H chart in uptrend: HH at 1.0950, HL at 1.0880. Price retraces to 1.0890 (near HL). You enter long at 1.0890, stop at 1.0870 (below HL). Target: new HH at 1.0960. Risk: 20 pips. Reward: 70 pips. R:R = 1:3.5. On FTMO $100K with 2 lots: risk = 20 * $20 = $400, reward = 70 * $20 = $1,400. Well within the $5,000 daily loss limit.","category":"strategy","relatedTerms":["order-block","fair-value-gap","liquidity-sweep","risk-reward-ratio"]},"_links":{"self":"https://runvigil.app/api/glossary/market-structure","page":"https://runvigil.app/learn/market-structure","allTerms":"https://runvigil.app/api/glossary","learn":"https://runvigil.app/learn"}}