What is a break of structure (BOS)?
In one line: A break of structure is when price closes past the last turning point in the direction of the trend, confirming the trend is still going.
A simple example
A stock is in an uptrend. Its last high, the last place price turned down, was $62. Since then, it pulled back to $59.
Now price rises again. A daily candle's body closes at $62.80, above $62. That's a break of structure, often shortened to "BOS." The trend just made a new Higher high, and buyers are still in charge.
In a downtrend, it's the mirror image. Price closes below the last low, making a new lower low.
The close rule
Only a candle body closing past the level counts. If price spikes to $63 with a Wick but closes at $61.50, nothing broke. That's a test, and it might even be a Fakeout.
This one rule filters out a lot of noise. Waiting for the close costs you a little price. It saves you from many moves that never held.
Why it matters
A break of structure tells you the trend is still alive. It's a signal to keep looking in the trend's direction, not a reason to buy on the spot.
Many traders wait for what comes next: a pullback. After the break above $62, price might drift back toward $60. A new higher low forming there is a clearer place to plan a buy, with a Stop loss under that low.
A common mistake
Mixing up a BOS with a change of trend. A break with the trend is a BOS. A break against the trend, like price closing below the last low in an uptrend, is a Change of character, a warning the trend may be turning. They mean opposite things. The difference is laid out in BOS vs CHoCH.
Another mistake is chasing the breakout candle itself. Buying right at the close of a big candle often means a wide stop and poor room to a target.
Questions
What does BOS mean in trading?
Break of structure: price closing past the last high in an uptrend, or the last low in a downtrend.
Does a wick count as a break of structure?
No. In our method, only a candle body closing past the level counts.
Which timeframe should I look for a BOS on?
Start with the bigger chart to set the direction, then use a smaller one to time the entry. See multiple timeframe analysis.
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