Break of Structure

A break of structure (BOS) is when price moves beyond the most recent swing point in the direction of the trend: a new higher high in an uptrend, or a new lower low in a downtrend. It confirms that the trend is continuing. The term is especially popular in smart money concepts, but the idea is pure classical price action: trends continue by breaking their previous extremes.

BOS vs change of character#

See Change of Character for the reversal side.

How to confirm a break#

Traders disagree on what counts as a real break. The main choices:

1. Wick break: any trade beyond the level. Fast, but many wicks reverse immediately.
2. Candle close: the candle must close beyond the level. Slower, filters more false breaks.
3. Displacement: a strong, large candle that closes well beyond the level, showing conviction. See Displacement.

Many traders require a close beyond the level on their chosen timeframe. A wick through the level that closes back inside is often a liquidity sweep rather than a true break. See Liquidity Sweeps and Stop Hunts.

Trading after a BOS#

A break of structure is usually not the best place to enter, because price is extended. Common approaches:

• Wait for a pullback after the break into an area such as the broken level (now possible support), an order block or a fair value gap, then enter with a stop below the new protected low. See Order Blocks and Fair Value Gaps.
• Enter on the break with momentum, accepting a worse price and wider stop, often with smaller size.
• Trail stops behind each new protected swing as the trend makes successive breaks.

Internal vs external BOS#

A break of a minor, internal swing is far less significant than a break of a major, external swing. In smart money terminology, traders often separate internal BOS, used for timing, from external or swing BOS, used for direction. See Internal vs External Structure.

When a BOS fails#

Sometimes price breaks a high, then quickly reverses and breaks the protected low. That failed continuation is a strong reversal signal, because traders who bought the breakout are now trapped. See Failed Breakouts and False Breaks and Structural Failure.

Common mistakes#

• Treating every wick above a high as a BOS, without waiting for confirmation.
• Buying immediately after a large breakout candle, with a stop far away and poor reward to risk.
• Mixing timeframes: a BOS on the 1 minute chart says little about the 4 hour trend.
• Forgetting the protected low: after each BOS, the swing low that started the move becomes the level that must hold.

Frequently asked questions#

What is a break of structure in trading?#

When price breaks beyond the most recent swing high in an uptrend, or swing low in a downtrend, confirming the trend is continuing.

Should a BOS be confirmed by a candle close?#

Many traders require a close beyond the level to filter out wicks that quickly reverse, but rules vary.

What is the difference between BOS and CHoCH?#

BOS breaks structure in the trend's direction; CHoCH breaks it against the trend, hinting at a possible reversal.

Next, learn the early warning of a reversal in Change of Character.