Market Structure & Liquidity · Entry 29 of 71

What Is Internal & External Structure?

Decoding major swing boundaries and minor fractal moves

Core Definition

Market Structure can be analyzed on multiple levels. It is commonly divided into External Structure and Internal Structure.

External Structure

• Represents the major swing highs and swing lows that define the overall market trend.
• 1. Determines the higher-timeframe directional bias.
• 2. Formed by significant impulsive moves.
• 3. Used to identify trend continuation or reversal.

Internal Structure

• The market is fractal in nature — meaning internal structure exists within external structure, and both must align for higher-probability setups.
• Understanding this relationship helps traders avoid trading against the dominant trend.