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Lesson 57 of 69

Market structure: BOS and CHoCH

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How to read this track

The next four lessons describe ICT / Smart Money Concepts (SMC) — a popular framework many traders use to read charts. It is one way of describing price behaviour, not the definitive or only correct approach, and no framework produces guaranteed results. Learn the vocabulary, test it yourself, and keep whatever survives your own backtesting.

What market structure actually means

Market structure is simply the sequence of turning points price leaves behind. A is a high with lower highs either side of it; a is a candle low with higher lows either side. Join those points in order and you have the skeleton of the — everything else on the chart is decoration.

  • : higher highs and higher lows. Buyers keep paying more, sellers keep failing lower.
  • : lower highs and lower lows.
  • Range: highs and lows roughly level with each other — structure is unclear, and most structure-based ideas work poorly here.
Uptrend and downtrend structureAn uptrend staircase making higher highs and higher lows, next to a downtrend staircase making lower highs and lower lows.UPTREND — higher highs, higher lowsHHHLDOWNTREND — lower highs, lower lowsLHLL

Structure is timeframe-specific

A 5-minute downtrend can be a single pullback inside a daily uptrend. Always name the you are describing. Most traders read structure on a higher timeframe for direction and a lower one for timing.

Break of Structure (BOS)

A break of structure is when price closes beyond the most recent swing point in the direction the trend is already going. In an uptrend, a candle that closes above the previous swing high is a BOS: the staircase of higher highs just added another step.

Break of Structure (BOS)Price makes a higher low, then pushes up and closes above the prior swing high. That close above the old high is labelled BOS and suggests the uptrend is continuing.PREVIOUS SWING HIGHSWING HIGHHIGHER LOWBOS — closed above the old highA break of structure happens in the direction of the existing trend — it suggests continuation, it does not guarantee it.
  • Mark the most recent significant swing high (uptrend) or swing low (downtrend).
  • Wait for a candle body to beyond it — many traders ignore wick-only breaks because they are far easier to fake.
  • Interpretation: the existing trend is more likely to continue. Traders using this framework will often then look for an entry on the pullback that follows.

Stay honest about what it tells you

A BOS is a description of what already happened, not a prediction. Trends break all the time immediately after a clean BOS. Treat it as one input to a decision, never as a reason to skip a .

Change of Character (CHoCH)

A change of character is the first break against the prevailing trend. In an uptrend, that means price closing below the most recent higher low. Nothing is yet — but the pattern that had been repeating has just failed for the first time.

Change of Character (CHoCH)After a series of higher highs and higher lows, price fails at the highs and then closes below the last higher low. That break lower is labelled CHoCH and warns the trend may be turning.LAST HIGHER LOWHIGHLOWER HIGHCHoCH — closed below the last higher lowBOS continues the trend. CHoCH is the first break against it — a warning sign, not a signal on its own.
BOSCHoCH
DirectionWith the trendAgainst the trend
What brokeThe last swing high (up) or low (down)The last higher low (up) or lower high (down)
SuggestsTrend continuationPossible trend reversal, or the start of a range
Common mistakeTrading a wick-only breakAssuming a reversal is confirmed by the first break

Reading the two together

  1. 1Identify the trend from the swing sequence on your higher timeframe.
  2. 2While BOS keeps printing in the trend direction, keep treating pullbacks as opportunities in that direction.
  3. 3When a CHoCH prints, stop assuming . Wait for the new direction to confirm itself with its own BOS before treating the trend as flipped.
  4. 4In a range, expect false breaks in both directions — structure signals are least reliable when there is no trend to break.

Practise this on a chart

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Related lessons & next steps

Support & resistanceThe beginner foundation that structure is built on.Next: Order blocksWhere price often reacts once structure gives you direction.

Key takeaways

  • Structure is the sequence of swing highs and lows, not the colour of individual candles.
  • Higher highs and higher lows define an uptrend; lower highs and lower lows define a downtrend.
  • A Break of Structure (BOS) suggests continuation; a Change of Character (CHoCH) warns of a possible reversal.
  • Always read structure on the higher timeframe first, then drop down for entries.

Knowledge check

3 quick questions — your best score is saved to your progress.

  1. 1. In an uptrend, what defines the structure?

  2. 2. A Break of Structure (BOS) usually suggests…

  3. 3. How does a Change of Character (CHoCH) differ from a BOS?

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