Smart Money Concepts

Break of Structure (BOS): trend continuation, explained

A Break of Structure, or BOS, happens when price closes beyond the most recent swing high (in an uptrend) or swing low (in a downtrend). In SMC language it is read as the existing trend continuing.

What it is

A BOS is a continuation signal in SMC terms: the trend made a new high (or low) in its own direction, so the current structure is still intact.

Many traders require a candle close beyond the level, not just a wick through it, because wicks are often liquidity grabs (see liquidity sweeps).

How to spot it

1. First establish the trend using market structure (HH and HL for up, LH and LL for down).
2. Mark the most recent swing high in an uptrend, or swing low in a downtrend.
3. Wait for a candle to close beyond that level on your chosen timeframe.
4. Mark the break, then update your swing points: the pullback low before the break becomes the next level to watch.

Worked example (illustrative)

Illustrative example: in an uptrend the last swing high is 110. A later candle closes at 112.5. That close is above 110, so the chart shows a bullish BOS. Nothing here says price must keep rising; it only labels what happened.

Common mistakes

• Calling a wick through the level a BOS. Define your rule (close vs wick) before you look at the chart.
• Confusing BOS with CHoCH. A BOS goes with the trend; a CHoCH is the first break against it.
• Chasing a break late. By the time the candle closes, much of the move may already have happened.

Educational content only, using made-up prices. It is not investment advice and not a recommendation to buy, sell or hold anything. Trading carries risk of loss.

Frequently asked questions

Related concepts

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