External Structure

External structure is the skeleton. In an uptrend it is the series of higher highs and higher lows you would still mark if you deleted the minor noise. A break of external structure is a break of that skeleton, a lower low in an uptrend or a higher high in a downtrend, on the timeframe you assigned to bias. This is the same idea as market structure on the trend page. The internal-versus-external split is only a reminder to choose a degree and stick to it. External structure is the degree that is allowed to change your directional bias. Internal structure is not.

Mark external swings at the closes or the wicks, but choose one and stay with it. A wick break of an external low is a warning. A close beyond it is the break. After an external break, the old trend is no longer the default. The next trade is either a pullback in the new direction or a stand-aside until the new skeleton is clear. Do not keep taking longs because the weekly chart is up if you had defined the daily swings as your external structure and the daily structure has broken. You do not get to appeal to a higher court you did not name in advance.

Set the bias from external structure and the timing from internal structure or from a level inside the leg. As long as the external higher low holds, dips are pullbacks. When it breaks and the break holds on a retest, the dip is no longer a dip. Targets belong at external pools, the major highs and lows, because those are the prices the larger swings actually care about. Internal targets are for partials.

Promoting an internal swing to external status because it supports the trade, then demoting it when it breaks. Also using a close through a tiny external level that you only called external after you saw the close. And ignoring an external break because the narrative, the theme, the indicator, still points the other way. If structure is your method, the break is the method.

External swings confirm late. The low of a reversal is external only after a later swing proves it. Anyone who claims to have marked the exact bottom as external in real time is, most of the time, redescribing a guess. And a single close through an external swing in a news spike can break structure without a new trend. Require the retest, or require the higher timeframe, before you invert a large bias. Write that requirement down.