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Key terms in this lesson
Lesson 3: 9.2: Break of Structure (BOS)
Identify trend continuation signals through Breaks of Structure and distinguish valid breaks from fakeouts.
1. Continuation Mechanics (BOS)
A Break of Structure (BOS) is the primary signal of trend continuation. It confirms that the dominant trend remains strong and that institutions are continuing to push price in the prevailing direction.
• Bullish BOS: Price breaks and closes above the previous valid swing high, creating a new Higher High.
• Bearish BOS: Price breaks and closes below the previous valid swing low, creating a new Lower Low.
★ Core Principle: A BOS is only confirmed once a candle successfully closes beyond the prior swing point.
2. BOS Validation and Filtering
A common mistake is treating any breach of a swing point as a BOS. If price pierces a previous high with a wick but instantly reverses and closes back inside the range, it is NOT a BOS.
This is a liquidity sweep or a fakeout. To protect capital, conservative traders always wait for the candle body close to confirm structural expansion.
Click to enlargeKNOWLEDGE RECONNAISSANCE
What is required to confirm a valid Break of Structure (BOS) in a bullish trend?
More lessons in this module
- 9.0: Introduction to Market Structure
- 9.1: Swing Highs & Swing Lows
- 9.3: Change of Character (CHoCH)
- 9.4: Understanding Market Liquidity Pools
- 9.5: Internal vs External Structure
- 9.6: Premium vs. Discount Pricing
- 9.7: Fair Value Gaps (FVG) & Imbalances
- 9.8: Putting It Together: The Market Structure Blueprint
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