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Who hasn't heard of the three-act-structure?
It's a basic, yet reliable outlining method that perfectly narrows down what every story must have: a beginning, a conflict and a resolution. With a very simple yet useful structure, it is one of the most effective ways to outline a story, and - unlike The Hero's Journey - it's not specific to any genre.
Each act is a guidepost in your writing journey. These acts are the bones of the story, they cannot support the story alone, but they support your story all the same. It is by no means the only structure available to you as you write, and it is open to many different interpretations.
A rule of thumb for writers, is that you need to know rules before you break them, and that's the case here as well. You need to know what the three act structure is before you try to change it up. Structure and events can be shuffled around, but there still needs to be a beginning, middle and end of your story. Otherwise, it's not really a story, is it?
Why does it work?
Long story short.
It helps you to narrow down the basic, key plot points in your story, and from there you can expand and work on the details as you see fit
Are there downsides to it?
Yes, the biggest one being - as you may have guessed - its simplistic nature. While it also happens to be one of its greatest strengths, the three act structure will hardly give you more insight into your story than what you already had, if only with better organization. The seven act structure, while also being a bit simplistic in nature, is the logical continuation from this outlining method.
  Ruin the surprise
We may write about the seven act structure in a future

Courtesy of Time Bender

The awesome Time Bender has provided most of the information for this article (as properly credited), so be sure to check out her other amazing work!

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