Let’s cut to it. Most retail traders get caught chasing moves that were never meant for them. They’re entering late, reacting to structure breaks without context, or fading moves without understanding what’s really happening behind the price.
If you're trying to trade like smart money on the reversal, at the turn then you need to know when the game is flipping. That’s where the Market Structure Shift (MSS) comes in. But not just any MSS. I'm talking about MSS that follow a liquidity sweep and are driven by real displacementnot weak candles, not in consolidation. Real intent. Real shift.
Here’s how I approach it.
What Actually Counts as a Market Structure Shift?
Everyone talks about market structure higher highs, lower lows, etc. But structure breaks alone don’t mean anything. A valid MSS isn’t just about breaking a swing point. It’s why it broke and how it broke that matters.
I only consider a shift valid when three things are in place:
If you don’t have all three, it’s just noise.
Liquidity Comes First
Everything starts with a liquidity sweep. That’s the trap.
Price has to reach into a pool of liquidity usually above equal highs, clean swing highs, or below clean lows to grab those orders, and reject. That rejection is key. It shows smart money is offloading positions into retail breakouts or stop hunts.
Without a sweep, I don’t care what breaks. No liquidity = no reversal setup.
So the first thing I do is mark out obvious liquidity levels. Equal highs, equal lows, trendline touches anywhere retail is likely to have their stops sitting. That’s where the fuel is.
Then Comes Displacement
After the sweep, I want to see displacement a sharp, aggressive move in the opposite direction.
Not a weak pullback. Not a slow grind. A real candle that shows intent.
Displacement is always obvious. You’ll get a clean candle, often engulfing multiple others, that breaks structure and leaves behind an imbalance what we call a Fair Value Gap (FVG). That imbalance is the signature of smart money hitting the market hard enough to leave a gap in the order flow.
If the candle’s weak, or if it happens during consolidation, I skip it. Displacement is what separates real reversals from fakeouts.
Here is a clean example of what it should look like.
Confirming the Shift
Once displacement confirms intent, I check if it actually broke structure.
That means:
When that happens, that’s your MSS. Price has grabbed liquidity, shown displacement, and broken a key point in the structure. At that point, we’ve got a confirmed shift in control.
Entries, Stops, and Targets
Here’s how I trade it.
After the MSS, I wait for price to pull back into the origin of the move. Usually, that’s going to be one of two things:
Once price comes back into that zone, that’s where I’m interested in getting in.
Stop loss always goes just above the high (for shorts) or below the low (for longs) of the displacement candle that caused the MSS. You’re giving it room to breathe, but keeping it tight enough to protect capital.
Targets are straightforward: go for the next pool of liquidity. That means swing lows (sell-side) if you’re short, or swing highs (buy-side) if you’re long. That’s where price is most likely to be drawn next.
A Clean Bearish Example
Let’s say price is trending up, putting in higher highs and higher lows. Then it takes out a recent swing high liquidity swept.
Immediately after that, a strong bearish candle drops and breaks the most recent higher low. That candle leaves an imbalance behind—perfect.
Now I’ve got:
✅ Liquidity sweep
✅ Displacement
✅ Break of structure
I mark out the FVG / MSS line, wait for price to retrace back into it, and enter the short. My stop goes above the displacement candle high. My target? The next clean swing low. That's the next spot where stops are resting where the market is drawn.
A Few Things to Watch Out For
This method works, but only if you’re strict about the rules.
The biggest mistake I see? Traders jump in too early trying to front-run the shift before displacement confirms it. Let the story unfold. Wait for the sweep. Wait for the candle that slaps the market and breaks structure. That’s your edge.
As shown here, the first "MSS" is invalid and not the A+ setup you're looking for.
Final Thoughts
Trading smart money reversals is about reading intent. You’re not just looking at price, you’re understanding why it moved the way it did.
When you combine a liquidity grab, displacement, and a break in structure, you're aligning with institutional activity. You're trading at the turn when smart money flips the script and leaves everyone else chasing.
This isn’t about trading every break. It’s about knowing which breaks matter.
Keep it clean. Stay patient. Follow the flow.
__________________________________________
Thanks for your support!
If you found this guide helpful or learned something new, drop a like 👍 and leave a comment, I’d love to hear your thoughts! 🚀
Make sure to follow me for more price action insights, free indicators, and trading strategies. Let’s grow and trade smarter together! 📈
If you're trying to trade like smart money on the reversal, at the turn then you need to know when the game is flipping. That’s where the Market Structure Shift (MSS) comes in. But not just any MSS. I'm talking about MSS that follow a liquidity sweep and are driven by real displacementnot weak candles, not in consolidation. Real intent. Real shift.
Here’s how I approach it.
What Actually Counts as a Market Structure Shift?
Everyone talks about market structure higher highs, lower lows, etc. But structure breaks alone don’t mean anything. A valid MSS isn’t just about breaking a swing point. It’s why it broke and how it broke that matters.
I only consider a shift valid when three things are in place:
- Liquidity has been taken (above a high or below a low).
- The shift is caused by a displacement candle that clearly shows urgency.
- The move happens with strength, not during chop or consolidation.
If you don’t have all three, it’s just noise.
Liquidity Comes First
Everything starts with a liquidity sweep. That’s the trap.
Price has to reach into a pool of liquidity usually above equal highs, clean swing highs, or below clean lows to grab those orders, and reject. That rejection is key. It shows smart money is offloading positions into retail breakouts or stop hunts.
Without a sweep, I don’t care what breaks. No liquidity = no reversal setup.
So the first thing I do is mark out obvious liquidity levels. Equal highs, equal lows, trendline touches anywhere retail is likely to have their stops sitting. That’s where the fuel is.
Then Comes Displacement
After the sweep, I want to see displacement a sharp, aggressive move in the opposite direction.
Not a weak pullback. Not a slow grind. A real candle that shows intent.
Displacement is always obvious. You’ll get a clean candle, often engulfing multiple others, that breaks structure and leaves behind an imbalance what we call a Fair Value Gap (FVG). That imbalance is the signature of smart money hitting the market hard enough to leave a gap in the order flow.
If the candle’s weak, or if it happens during consolidation, I skip it. Displacement is what separates real reversals from fakeouts.
Here is a clean example of what it should look like.
Confirming the Shift
Once displacement confirms intent, I check if it actually broke structure.
That means:
- In an uptrend, I want to see price break a previous higher low after sweeping a high.
- In a downtrend, I want price to break a lower high after sweeping a low.
When that happens, that’s your MSS. Price has grabbed liquidity, shown displacement, and broken a key point in the structure. At that point, we’ve got a confirmed shift in control.
Entries, Stops, and Targets
Here’s how I trade it.
After the MSS, I wait for price to pull back into the origin of the move. Usually, that’s going to be one of two things:
- The Fair Value Gap (imbalance left by the displacement candle)
- Or the MSS line itself (Shown on the example)
Once price comes back into that zone, that’s where I’m interested in getting in.
Stop loss always goes just above the high (for shorts) or below the low (for longs) of the displacement candle that caused the MSS. You’re giving it room to breathe, but keeping it tight enough to protect capital.
Targets are straightforward: go for the next pool of liquidity. That means swing lows (sell-side) if you’re short, or swing highs (buy-side) if you’re long. That’s where price is most likely to be drawn next.
A Clean Bearish Example
Let’s say price is trending up, putting in higher highs and higher lows. Then it takes out a recent swing high liquidity swept.
Immediately after that, a strong bearish candle drops and breaks the most recent higher low. That candle leaves an imbalance behind—perfect.
Now I’ve got:
✅ Liquidity sweep
✅ Displacement
✅ Break of structure
I mark out the FVG / MSS line, wait for price to retrace back into it, and enter the short. My stop goes above the displacement candle high. My target? The next clean swing low. That's the next spot where stops are resting where the market is drawn.
A Few Things to Watch Out For
This method works, but only if you’re strict about the rules.
- Don’t take MSS setups in consolidation. Wait for clean, impulsive breaks.
- If the shift happens without displacement or imbalance, skip it. It’s not clean.
- Be realistic with stops. Tight is good, but don’t choke the trade. Give it the structure it needs.
The biggest mistake I see? Traders jump in too early trying to front-run the shift before displacement confirms it. Let the story unfold. Wait for the sweep. Wait for the candle that slaps the market and breaks structure. That’s your edge.
As shown here, the first "MSS" is invalid and not the A+ setup you're looking for.
Final Thoughts
Trading smart money reversals is about reading intent. You’re not just looking at price, you’re understanding why it moved the way it did.
When you combine a liquidity grab, displacement, and a break in structure, you're aligning with institutional activity. You're trading at the turn when smart money flips the script and leaves everyone else chasing.
This isn’t about trading every break. It’s about knowing which breaks matter.
Keep it clean. Stay patient. Follow the flow.
__________________________________________
Thanks for your support!
If you found this guide helpful or learned something new, drop a like 👍 and leave a comment, I’d love to hear your thoughts! 🚀
Make sure to follow me for more price action insights, free indicators, and trading strategies. Let’s grow and trade smarter together! 📈
𝟔 𝐘𝐄𝐀𝐑𝐒 𝐄𝐗𝐏𝐄𝐑𝐈𝐄𝐍𝐂𝐄𝐃 𝐓𝐑𝐀𝐃𝐄𝐑
💎 Free Signals
t.me/codeandcandle
🎁 Free trading Discord community
bit.ly/TehThomas
🥇 Best exchange - 20% cashback
bit.ly/BloFin20
💎 Free Signals
t.me/codeandcandle
🎁 Free trading Discord community
bit.ly/TehThomas
🥇 Best exchange - 20% cashback
bit.ly/BloFin20
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
𝟔 𝐘𝐄𝐀𝐑𝐒 𝐄𝐗𝐏𝐄𝐑𝐈𝐄𝐍𝐂𝐄𝐃 𝐓𝐑𝐀𝐃𝐄𝐑
💎 Free Signals
t.me/codeandcandle
🎁 Free trading Discord community
bit.ly/TehThomas
🥇 Best exchange - 20% cashback
bit.ly/BloFin20
💎 Free Signals
t.me/codeandcandle
🎁 Free trading Discord community
bit.ly/TehThomas
🥇 Best exchange - 20% cashback
bit.ly/BloFin20
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.