I have been reading up on market structure highs and lows and whilst the concept is fairly basic, I've found some of the information on entry and exit strategy a little confusing. Could someone clarify what the principle strategy is with regards to MSH and MSL. Also on another note how is the third candle called a higher low or a lower high, where does it takes its reference from, Thanks.
You have posed a very practical question! MSH and MSL are only seen after the events. Most traders will look for previous S&R lines, which is more of what you will read in the textbooks. Fewer traders will project where the price will more than likely go to! http://www.scribd.com/doc/2034473/Harmonic-Patterns Even fewer traders will just sit and wait, and then buy / sell when they think that a low risk trade is now warrented. You are starting on the right path, but beware the usual trap that most fall into! Before long, you will be looking at Fib, Pivots, Elliot Wave, and many other "teachings". The first, and most important, question you might ask yourself, is, if so many have access to ALL this information, then why do so many fail, and very few suceed?