Market structure
Break of structure (BOS) and CHoCH
Market structure is the backbone of SMC and ICT. A break of structure confirms the trend is continuing; a change of character is the first sign it may be reversing.
- BOS = trend continuation
- CHoCH = possible reversal
- Confirm with a candle close
- Read it on multiple timeframes
Break of structure
In an uptrend, a candle closing above the last swing high is a bullish BOS. In a downtrend, a close below the last swing low is a bearish BOS.
Change of character
In an uptrend, the first close below the last higher low is a CHoCH: buyers lost control. It is a warning, not yet a new trend.
Using it for entries
After a BOS or CHoCH, mark the order block or FVG that caused it and wait for a return. FIMO X also checks that the higher timeframe agrees before showing a setup.
Frequently asked questions
Wick or close for a BOS?
A candle close is more reliable; wicks through a level are often liquidity sweeps.
What is MSS?
Market structure shift, a CHoCH accompanied by strong displacement.
Which timeframe defines structure?
Use the higher timeframe for bias and a lower one for entries.
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