Break of Structure (BOS) & CHoCH

Market structure is the skeleton of price action. By labeling swing highs and lows, you can see whether the market is trending up, down, or ranging. BOS and CHoCH are the two events that tell you when a trend is continuing or reversing.

Reading Market Structure

A trend is defined by its highs and lows:

• ▸Uptrend: higher highs (HH) + higher lows (HL).
• ▸Downtrend: lower highs (LH) + lower lows (LL).
• ▸Range: equal highs/lows — no clear direction.

BOS — Break of Structure (Continuation)

In an uptrend, when price breaks above the previous higher high, that's a bullish BOS — the trend is continuing. In a downtrend, breaking below the previous lower low is a bearish BOS. A BOS tells you the trend is intact; you look for entries in the trend direction.

CHoCH — Change of Character (Reversal)

CHoCH is the first sign that a trend is reversing. In an uptrend, if price fails to make a new high and instead breaks below the last higher low — that's a CHoCH. The structure has changed from higher highs/lows to a lower high/low. The character of the market has shifted.

How to Trade BOS & CHoCH

Trend Continuation (BOS Entry)

1. 1.Identify the trend — e.g., uptrend with clear HH/HL.
2. 2.Wait for a pullback to a higher low (or an order block / FVG).
3. 3.Enter long when price breaks the previous high (BOS confirms continuation).
4. 4.Stop below the recent higher low.

Trend Reversal (CHoCH Entry)

1. 1.Spot a CHoCH — uptrend breaks its last higher low.
2. 2.Wait for the first pullback in the new down direction.
3. 3.Enter short at a bearish order block or resistance.
4. 4.Stop above the old high; target the next liquidity pool below.