A Break of Structure (BOS) occurs when price breaks through a significant swing high or swing low, signaling a potential change or continuation of the current trend. A bullish BOS happens when price breaks above the most recent swing high, while a bearish BOS occurs when price breaks below the most recent swing low. This concept is central to Smart Money Concepts (SMC) and ICT-style trading methodologies, where it helps traders identify trend direction and potential entry points.
Example
“Price created a bullish break of structure by taking out the previous swing high on the 1-hour chart, confirming the shift from a downtrend to an uptrend.”