Trading glossary
What is a break of structure (BOS)?
A break of structure is a move beyond the previous swing in the direction of the trend, which confirms the trend is continuing.
In an uptrend, a break of structure happens when price makes a new higher high by moving above the previous swing high. In a downtrend, it is a new lower low below the previous swing low. The term is common in smart money concepts, but the idea is standard trend analysis.
A break of structure confirms continuation. A break in the opposite direction, against the trend, is usually called a change of character.
How traders use it
- Use a close beyond the previous swing as the rule, rather than a wick.
- After a break of structure, watch the pullback: it often returns towards the broken swing before continuing.
- Track the latest swing that would have to break for the trend to change.
Example
In an uptrend on the one-hour chart, the last swing high is 2,380 on gold. Price closes at 2,386. That close above the previous high is a bullish break of structure, confirming the uptrend is still in control.
Frequently asked questions
What is the difference between BOS and CHoCH?
A break of structure is with the trend and confirms continuation. A change of character is against the trend and is an early sign it may be reversing.
Is BOS only used in smart money concepts?
The label is, but the idea, a new high in an uptrend or a new low in a downtrend, is basic trend analysis.
Related terms
Often confused with
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.