BOS: break of structure
A BOS is when price closes beyond the last swing point in the direction of the trend. In an uptrend a close above the last swing high, in a downtrend a close below the last swing low, shows that the current structure continues. A wick is not enough; the close decides.
What is a BOS?
An uptrend moves on with higher highs and higher lows. When price closes above the last swing high, the way to a new higher high is open. That close is called a break of structure (BOS).
The same holds the other way round in a downtrend: a close below the last swing low shows that the falling structure continues. A BOS is therefore a sign of continuation, not reversal.
The abbreviations BOS and CHoCH come from the approach known as "Smart Money Concepts" (SMC). This page uses the terms only as a measurable definition of structure.
How it forms
- A swing high forms. Price makes a high and pulls back. Once a few candles to its right have stayed lower, the high becomes known as a swing high.
- The pullback leaves a low. The lowest point of the pullback becomes the new low the rise rests on.
- A close comes above the swing high. Price rises again and a candle closes above the swing high. That close is the BOS.
- The protected level is set. The lowest low between the swing high and the BOS candle is now the protected low of the rising structure. Whether the structure breaks is measured against this low.
Three outcomes at the swing high
When price reaches the last swing high, three different pictures can follow. The close makes the difference.
BOS
The candle closes clearly above the swing high. The rising structure continues and a new protected low forms.
Wick through
The wick goes above the high but the close stays below it. This is not a BOS; it often shows the high being tested.
Falls short
Price turns back before reaching the high and leaves a lower high. The structure may be weakening, but it is not broken.
Measuring a BOS
- The close decides the break. A candle that only wicks through the swing high is not a BOS.
- The close is expected to clear the level by a small margin. A close just above the level can stay within the usual variability.
- A swing breaks only once. The next BOS needs a newer swing high to form.
- A swing point is only known once the candles to its right have closed. A high that is still forming cannot be broken.
What it shows, what it does not prove
What it shows
- That the last swing point in the trend's direction was cleared by a close
- That the current structure continues, and where the new protected level is
- A way to measure structure by the close rather than the wick
What it does not prove
- That price will keep moving in the direction of the break
- That the break will not be reversed in the next candle
- That a BOS on one timeframe holds on other timeframes
The MarketLevelMap view
How it relates to zones
In MarketLevelMap's Price Action view a BOS is marked by these rules.
- Only closed candles are used; the candle still forming does not count.
- A swing point forms when it is more extreme than a set number of candles on each side, and can be broken only after the candles to its right have closed.
- The margin by which the close must clear the swing is measured in ATR, so the threshold adapts to current volatility.
- While the direction is still undetermined, whichever side is broken by a close first sets the direction.
- On the chart it shows as a short line from the broken swing's candle to the break candle, labelled BOS ↑ / BOS ↓. The protected level is not drawn; the "Structure" table shows the current direction and the protected level.
Often confused with
For general information only. Not investment advice.Last updated: