Market Structure Shift vs Change In State Of Delivery - ICT

ICT-style comparison of market structure shifts vs. change in the state of delivery (CISD), with TradingView examples on entries, order blocks, and early vs. late signals.

Key Takeaways

CISD is an earlier, more aggressive signal; MSS is a later, more confirmed signal.
Choosing between them depends on risk tolerance and how much confirmation the trader wants.
Order blocks, fair value gaps, and retests are central to entry execution with both concepts.
Inversions can complement CISD and MSS in identifying changes in order flow.

What the video covers

The video compares market structure shifts (MSS) and the change in the state of delivery (CISD) as signals of order flow change.
A market structure shift is a displacement and close over or below a swing high or swing low, shifting trend from bullish to bearish or vice versa.
The change in the state of delivery is a close and displacement below the opening price of an up-close candle or series of up-close candles, validating an order block.
CISD typically occurs before the MSS, though in some examples both happen on the same candle.
Worked TradingView examples show identifying CISD and MSS around fair value gaps and order blocks.
CISD can offer an earlier entry than MSS, often on a retest of the order block with a stop above the high and a 1:1 target.
Entries can also be taken at a fair value gap or the 0.5 (mean threshold) of the order block.
Earlier entries are not always better: a CISD signal may produce a losing trade where the MSS would have avoided the position.
Inversions, covered in a previous video, can also signal a change in order flow and are combined with CISD and MSS in an oil futures example.
The oil futures example walks from the monthly to the daily chart, looking at buy-side liquidity and premium order blocks to identify the shift to bearish order flow.

Chapters

What is the main difference between a market structure shift and the change in the state of delivery?

A market structure shift requires displacement and a close beyond a swing high or low. The change in the state of delivery requires a close and displacement below the opening price of up-close candles into a level, which validates an order block. CISD usually appears first.

Why might a trader prefer the change in the state of delivery over a market structure shift?

CISD can provide an earlier entry, often on an order block retest, which may improve the risk-to-reward profile. The video notes, however, that early signals can also lead to losing trades.

How are inversions related to these concepts?

The video says inversions, discussed in a previous video, can also signal a change in order flow and can be used together with CISD and MSS to decide which signal suits the trader best.

Full Transcript — Download SRT & Markdown

Speaker A

how's it going everyone this video is going to be a comparison between market structure shifts and the change in the state of delivery. We'll also briefly discuss how inversions fit into the equation. So let's hop into the PDF before finding some examples in TradingView.

Speaker A

before finding some examples in trading view so here we are in the PDF and we are going to quickly review what a market structure shift is and what the change in the state of delivery is now I have individual videos on both of these

Speaker A

So here we are in the PDF, and we are going to quickly review what a market structure shift is and what the change in the state of delivery is. Now, I have individual videos on both of these concepts, and if you haven't seen them, I would watch those before this video. They will be linked in the description below. But to quickly review, a market structure shift is a change in trend, so it is when we shift from bullish to bearish or from bearish to bullish. Now, what it is, is displacement over or below a swing high or swing low. So you can see here we create a swing low, we sweep liquidity, and then we get displacement and a close below this swing low, shifting structure.

Speaker A

bearish to bullish now what it is is it's displacement over or below a swing high or swing low so you can see here we create a swing low we sweep liquidity and then we get displacement and and a

Speaker A

Now, how does this compare to the change in the state of delivery? Well, the change in the state of delivery is not focused on the close below a swing high or swing low, in this case a swing low. It is focused on the close and displacement below the opening price of the up-close candle, or series of up-close candles, into an important level, validating it as an order block. So you can see here we displace and close below the opening price, and that creates an order block.

Speaker A

a swing low it is focused on the close and displacement below the opening price of this up close or series of up close candles into an important level validating it as an order block so you can see here we displace and close below

Speaker A

Now, how do these two compare on a chart? You can see the change in the state of delivery happens prior to the market structure shift. In this example, you can see both occur on the close of the same candle. However, when we get into TradingView and look at a few examples, you can see that the change in the state of delivery will happen prior to the market structure shift. So let's hop into TradingView and go over a few examples of this.

Speaker A

close of the same candle however when we get into trading View and look at a few examples you can see that the change in the state of delivery will happen prior to the market structure shift so let's hop into trading View and go over a few

Speaker A

It makes sense. In this first example, we are just going to take a look at identifying the market structure shift versus the change in the state of delivery. Here you can see we have a discount fair value gap that price wretched into, and then closed back inside the range. If I'm looking for the change in the state of delivery, I want to see price closing over this down-close candle. Now, if I'm looking for a market structure shift, I want to see price displacing and closing over this swing high. Here, on the next candle, we get both of those, which validates this order block as well as the market structure shift for price to then retrace or continue higher. And there we go, you can see we retest the order block before moving higher.

Speaker A

fair value Gap that price wretched into and then closed back inside the range if looking for the change in the state of delivery I want to see price closing over this down close candle now if I'm looking for a market structure shift I

Speaker A

Now let's get into a few examples which explain the differences between these two and why one might be preferred over the other. Let's take a look at this next example and look at the differences between the change in the state of delivery and the market structure shift. You can see we have an old high that we hit over here. If we are going to get a change in the state of delivery, we have to get a close below the opening price in this series of up-close candles. Now, if we're going to get a market structure shift, we have to get a close and displacement below this swing low. So let's see how this plays out.

Speaker A

higher and there we go you can see we retest the order block before moving higher now let's get into a few examples which explain the differences between these two and why one might be preferred over the other let's take a look at this

Speaker A

You can see here price closes below the series of up-close candles, validating it as an order block. So, just using the change in the state of delivery, we have now shifted to bearish and are looking for this old low over here. However, you can see we haven't shifted structure yet. Here we finally get that displacement and close below this low. Well, this low is our shift in structure, but if you notice, we never get a retracement before running this old low.

Speaker A

delivery we have to get a close below the open opening price in this series of up Clos Candles now if we're going to get a market structure shift we have to get a close and displacement below this swing low so let's see how this plays

Speaker A

So, rewinding this price action, if I was going to be looking for an entry, how would I do that for the change in the state of delivery, and how would I do that for the market structure shift? With the change in the state of delivery, once we get this close below the opening price here, I can be searching for a short entry. Now, in many cases I will look to take an entry right when it retests the order block, my stop on the high, and then my target. However, with a 1:1 risk to reward, what can I do? Well, I can notice there is a fair value gap right here, which I can look to take an entry on. Another thing I will do is look to find the 0.5 or mean threshold of the order block and use that as an entry as well. So you can see it tags in there, and then we hit TP.

Speaker A

however you can see we haven't shifted structure yet here we finally get that displacement and close below this low here well as this low that is our shift in structure but if you notice we never get a retracement before

Speaker A

Now, with this market structure shift, price never retraces, and I would have never gotten an entry. The one benefit of using the change in the state of delivery is it can provide an earlier entry than market structure shifts. Now, although the change in the state of delivery can get you into positions earlier than a market structure shift, this is not always a good thing. For example, here, if price is going to change the state of delivery, we need a close below this series of up-close candles, and if price is going to shift structure, we'd need displacement and a close below this swing low. Let's see what happens. You can see here we do get the close below the series of up-close candles, changing the state of delivery. Now let's see if we get the market structure shift.

Speaker A

structure shift with the change in state of delivery once we get this Clos below the opening price here I can be searching for for a short entry now in many cases I will look to take an entry right when it retests the order block my

Speaker A

So, although a change in the state of delivery might get you into a position earlier, it's not always a good thing, because it may get you into a position that ends up being a loser. Where, if I was looking for a market structure shift here, we never got displacement or a close below the old low, which never shifted structure, and it remains bullish, so I would have never been looking for a short position here.

Speaker A

thing I will do is look to find the 0.5 or mean threshold of the order block and use that as an entry as well so you can see it tags in there and then we hit RTP now with this Market structure shift

Speaker A

Now, in my last video I discussed inversions, and they can also be used to signify a change in order flow. If you haven't seen that video, I'll link it in the top right as well as the description below. Let's hop into one more example to explain how all three of these can be used together and which one suits you best. So here we are on the oil futures monthly chart. You can see we have buy-side liquidity resting here, so let's drop down to the daily chart. Here we are on the daily chart, and we'll zoom into this price action. You can see we have the old high resting here, and buy stops resting here as well. Let's let this play out and look at the different ways that order flow shifts from bullish to bearish.

Speaker A

delivery can get you into positions earlier than a market structure shift this is not always a good thing for example here if price is going to change the state of delivery we need a close below this series of up close candles

Speaker A

Here we get a raid of those buy stops and the old monthly high. The three ways we are looking for order flow to change are: an inversion, when this bullish fair value gap gets closed below; a change in the state of delivery, when this series of up-close candles gets closed below, validating that; or a market structure shift, when this swing low gets displaced and closed below. Letting this play out, you can see we do get this displacement and close over the 50% of this fair value gap, but not completely below the fair value gap. So you could consider this an inversion, but I prefer to wait for a full closure below here. You can see we get that inversion, as well as the change in the state of delivery, validating this now as an order block. On the next candle, you can see we retest this order block. However, we do not shift structure yet; we create a new up-close candle. Now, if you notice, on the next day, or the day after hitting this up-close candle, we get the move down. This is a shift in structure. So now we have had an inversion, a change in the state of delivery, and our market structure shift. But you notice the market structure shift happens much later than the change in the state of delivery and the inversion.

Speaker A

candles here changing the state of delivery now let's see if we get the market structure shift so although a change in the state of delivery might get you into a position earlier it's not always a good thing because it may get you into a

Speaker A

Zooming back out a little, what do we look for on a market structure shift? Ideally, we're looking for price to retrace to a premium, or what do we still have in this premium of the range? An order block. So here we reach into this order block and get a reaction out of there, and if you notice, we create another order block here. You can see we retest that and then start

Speaker A

been looking for a short position here now in my last video I discussed inversions and they can also be used to signify a change in order flow and if you haven't seen that video I'll link it in the top right as well as the

Speaker A

description below let's top into one more example to explain how all three of these can be used together and which one suits you best so here we are on oil Futures monthly chart you can see we have buy side liquidity resting here so

Speaker A

let's drop down to the daily chart so here we are on the daily chart and we'll go ahead and zoom into this price action over here and you can see we have the old high resting here and then we have

Speaker A

buy stops resting here as well so let's let this play out and look at the different ways that order flow shifts from bullish to bearish so here we get a raid of those buy stops and the old monthly

Speaker A

high now the three ways we are looking for order flow to change is an inversion so when this bullish fair value Gap gets closed below when the series of up closed candles here gets closed below we're validating that as a change in the

Speaker A

state of delivery or when this swing low gets displaced and closed below creating a market structure shift but letting this play out you can see we do get this placement and it close over the 50% of this fair value Gap but not completely

Speaker A

below the fair value Gap so you could consider this inversion but I prefer to wait for a full closure below here you can see we get that inversion as well as the change in the state of delivery validating this now as

Speaker A

an order block on the next candle you can see we retest this order block here however we do not shift structure yet we create a new up Clos candle now if you notice on the next day or the day after hitting this up close

Speaker A

candle we get the move down now this is a shift in structure so now we have had a a inversion change in the state of delivery and our Market structure shift but you notice the market structure shift happens much later than the change

Speaker A

in the state of delivery and the inversion now zooming back out a little what do we look for on a market structure shift ideally looking for price to retrace to where a premium or what do we still have in this premium of

Speaker A

the range an order block so here we reach into this order block and then get a reaction out of there and if you notice we create another order block here you can see we retest that and then start to continue lower

Speaker A

but the main point of this was to show that the inversion and the change in the state of delivery will occur earlier than the market structure shift and generally that is used to get in prior to the expansion move when the market

Speaker A

structure shift you're looking for a retracement to a premium or count array to get short or long now you're probably wondering which one of these is best to use inversions Market structure shifts or order blocks and really it depends on

Speaker A

what your eyes see best and what makes you feel the most confident I personally prefer to use order blocks however I know people that use inversions and those that just use Market structure shifts as well it really just depends

Speaker A

what fits your system the best and then using that overall I hope you found this video helpful in seeing the differences between Market structure shifts and the change in the state of delivery I hope you go ahead and back test this for

Speaker A

yourself and see which one works best for you if you guys have any questions feel free to leave them in the comments below and I'll see you guys next week have a good one

Topics:market structure shiftchange in state of deliveryCISDICTorder blockfair value gapinversionliquidityTradingViewsmart money concepts

Get More with the SozAI App

Transcribe recordings, audio files, and YouTube videos — with AI summaries and speaker detection. 30 minutes free.

App Store Google Play

Or transcribe another YouTube video here →

Free tools: TXT to SRT · SRT Validator · Merge SRT · Subtitle to Text · All tools