If you manually mark internal structure every trading session, you are repeating the same chart work again and again. The problem isn’t simply the time involved — repeated manual mapping can create hesitation, inconsistent structure identification and late entries.
This lesson shows the mechanical process I use to identify internal structure inside a larger swing move, including how an internal break of structure (IBOS) is formed, how internal highs and lows are validated, and how premium and discount fit into the process.
I’ll first walk through the structure manually so you understand the logic behind the levels, then show how the Structure Companion Tool applies those same rules automatically across the chart.
Start With Swing Structure
Before we start looking at internal structure, we first need to map out our swing structure.
We start with the last bullish move to the upside. This gives us a change of character, and when that change of character occurs at the high of a strong upside move, it can indicate a potential short-term bearish move.
The candle then closes down below the previous candle, creating the valid high for the swing structure.
The same sequence is then used to establish the low. Once the candle closes down, we can use that level as the low for the swing structure.
Watch the swing structure and change of character → 00:41
Once that swing structure is mapped, we can start looking for the smaller moves developing inside it.
Not every minor move is automatically tradable. We first need to understand the flow and wait for the internal structure to validate.
How Internal Structure Is Validated
We now start looking at the internal structure candle by candle.
The important part is that we don’t simply decide that every minor high or low is valid. We need the correct candle close to confirm the level.
At 01:48, the tool begins showing the same process automatically. It identifies the potential low, and then the following price action provides the validation.
Watch the internal low being identified → 01:48
At 01:53, the candle closes and validates the internal low.
Watch the candle close that validates the internal low → 01:53
Once validated, that internal low can be plotted as part of the developing internal structure.
This is the key distinction: we aren’t guessing where internal structure is. We are waiting for the price action to validate it.
The First Internal Break of Structure — IBOS
Once the internal structure has started to form, we can look for the first internal break of structure.
In this example, the market needs to continue down and break the relevant low.
Until that happens, we don’t have a validated internal structure break.
When price finally breaks through the low, we get the first IBOS.
Watch the first IBOS form → 02:35
This gives us a mechanical way of identifying the internal break rather than simply reacting to every small movement on the chart.
From there, we can begin looking for the next valid internal swing move.
Internal Structure and Liquidity
After the first IBOS, we continue applying the same structural logic.
We have the current high and then wait for the correct price action to confirm the low.
Once the candle closes up above the relevant candle high, we have the current low.
But there is another important piece of information developing.
The current bullish move has pulled back into the wick and taken the low for liquidity.
That means we need to understand what has already happened before deciding what the market may do next.
A potential supply area also develops as the internal structure continues.
Watch the internal supply and liquidity logic → 03:28
The supply area can potentially reverse price and run the previous low, creating a potential shift back to the downside.
What Happens When Price Goes Too Deep Into Supply?
Price eventually pulls back into the supply area.
However, it pushes quite deeply into the zone.
When price moves this deeply into supply, we have to consider that it could take the high and shift higher or sweep the high before moving away.
Watch the supply zone being removed → 04:07
Because price has moved too deeply into the zone, we remove it.
But the important point is that the current swing is still bearish.
Removing an internal supply area does not automatically mean that the larger swing structure has changed.
We continue to follow the structure that has actually been validated.
Following the Liquidity Sweep
Price then develops potential highs that can be run.
It pushes into the high, fails to break it, pushes away and doesn’t take the main swing high.
The market can therefore continue lower, but we want to see the higher move develop rather than simply assuming the current high will hold.
The higher move eventually occurs.
Price runs the previous high and creates a sell-off. We then see sideways price action before price sweeps above the high and closes back down.
That gives us the information that the market is potentially going to run for the low.
Watch the liquidity sweep and sell-off → 05:03
The objective is now for price to run the low and eventually the swing low.
Price then runs straight down and takes the low.
When the Swing Structure Breaks
Once price takes the low, the existing internal levels are removed because the swing structure has now been broken.
We have a new change of character to the downside.
Watch the swing structure break and new bearish structure → 05:50
We can now mark the new high and low of the current swing and maintain the bearish bias.
This is important because the internal structure we use from this point is developing inside a newly established bearish swing.
Sales using the new internal structure therefore have a different context from the earlier sweep.
Applying the Same Rules Automatically
Up to this point, we’ve mapped the structure manually.
Now we can see how the Structure Companion Tool applies the same rules automatically.
The tool isn’t changing the process. It is applying the same structural logic without requiring us to repeatedly perform the same manual chart work.
Watch the Companion Tool apply the same structure process automatically → 06:50
A close up gives us a validated weak low, the next candle turns solid and the market pushes into the area of balance.
From there, we can mark the potential sell move from the high down to the low.
Premium and Discount
The dotted line represents the 50% level.
Above 50% is premium.
Below 50% is discount.
The basic framework is:
- Sell in premium.
- Buy from discount.
Watch the premium and discount levels → 07:10
This gives us another layer of context.
Rather than simply seeing a bearish move and immediately looking to sell, we can wait for price to pull back into premium before looking for the opportunity.
The previous sell occurred in premium.
The idea is therefore to wait for price to return into premium before looking for the next move.
Waiting for Internal Structure to Validate
As the market continues, the old structure is removed when it is no longer relevant and we wait for the new internal structure to develop.
A close down plots a potential internal high.
But again, we don’t immediately treat that as confirmed internal structure.
We need the market to provide the required validation.
Watch the potential internal high being plotted → 08:20
Price then breaks up, creating the first IBOS.
Watch the IBOS being created → 08:33
We now have a valid internal low and the internal structure can continue to develop.
The objective is for the market to continue up, shift structure and then pull back into premium within that internal structure.
Internal Structure Must Align With the Swing
Price then pushes higher and enters supply.
This can be a good point to move down to a lower timeframe for the entry because price is now inside the potential supply area.
We want to look for the run down and the internal shift.
Watch the supply interaction and lower-timeframe entry → 09:12
To go with the flow, the internal structure needs to align with the swing structure.
Price then pushes down and closes through the relevant level.
That gives us the valid shift and a new IBOS.
We then wait for the next valid low.
Once that low is validated, we have the current move mapped.
Entries can then be considered in premium, looking for the run for the low and eventually the lower low.
Depending on the system, this can be approached through the candlestick entry or the 50% premium level.
Don’t Just Jump In On the Break
This is one of the most important parts of the process.
Price pushes up and sweeps the low rather than breaking it.
This is where traders can easily jump into a position because they believe they have seen a break.
But the market can reverse.
Watch why jumping in on the break can cause problems → 10:58
Instead, we wait for price to return into the appropriate location.
In this example, price pulls back inside the 50% premium area.
Watch the pullback into premium and the entry → 11:19
This is the difference between simply reacting to a break and following the complete structure process.
The Three-Step Structure System
The process shown in this lesson fits into three steps.
Step 1 — Mechanical Structure
First, you need to understand the mechanical structure.
That means understanding the rules for identifying swing structure, internal structure, changes of character, valid highs and lows and internal breaks of structure.
Step 2 — Structure Companion Tool
Once you understand the structure, the Structure Companion Tool applies those same rules automatically across the chart.
This removes the need to repeatedly perform the same manual structure mapping every trading session.
Step 3 — Execution Model
The final step is understanding how to execute inside that structure.
That is where the execution model inside the Novice to Pro Mastermind comes into the process.
Watch the three-step structure system → 10:45
The tool isn’t replacing your understanding of structure.
It is applying the structural process mechanically once you understand the rules.
Stop Guessing Internal Structure Manually
The whole purpose of this process is to remove the unnecessary manual work and guesswork from internal structure.
You first establish the swing structure.
Then you identify the internal highs and lows.
You wait for those levels to be validated.
You identify the IBOS.
You follow the developing internal structure.
You watch how price interacts with liquidity and supply.
You use premium and discount to identify the appropriate location.
And, most importantly, you make sure the internal structure aligns with the larger swing structure before looking for execution.
The Companion Tool applies this same process mechanically across your charts.
Watch the final example and complete structure process → 11:42
Instead of spending every trading session manually marking the same internal structure, the same structural rules can be applied consistently while you focus on understanding the market and executing the model.
The Structure Companion Tool
If you understand the mechanical structure process but want to remove the repeated manual chart work, you can learn more about the Structure Companion Tool here:
Get the Structure Companion Tool
If you want to take the next step and learn how to execute within that structure, you can learn more about the 90-Day Profit Trading System here: