A break of structure (BOS) is a candle that closes beyond the last confirmed swing in the trend's direction: above the last swing high in an uptrend, below the last swing low in a downtrend. A change of character (CHoCH) is the first close beyond a swing the other way. A wick through the level counts for neither. Only the close does.
Same rule both times. The difference is which way structure pointed before the break.
Every chart below is a replay of simulated candles, read by that one rule.
What is market structure?
The order of swing highs and swing lows. Higher highs and higher lows make an uptrend. Lower highs and lower lows make a downtrend. A mix is a range, and a range has no direction to trade with.
A swing high is a candle whose high beats the candles on each side of it. So it can't exist until the candles after it have closed. Here that's 3 a side, which is why every label below appears 3 candles late.
Simulated 15-minute candles, not market data. Swings are confirmed by 3 candles on each side.
Read as text
- A swing high is a candle whose high beats the 3 candles on each side; it is only confirmed when those 3 later candles have closed.
- Swing high at 79.28, confirmed 3 candles after it printed.
- Swing low at 78.65, confirmed 3 candles after it printed.
- Higher low at 78.80, confirmed 3 candles after it printed.
- Higher high at 79.49, confirmed 3 candles after it printed.
- Higher high at 79.82, confirmed 3 candles after it printed.
- Higher low at 79.26, confirmed 3 candles after it printed.
- Higher high at 80.32, confirmed 3 candles after it printed.
- Higher low at 79.69, confirmed 3 candles after it printed.
- Higher highs + higher lows = uptrend.
How this window was chosen: The first 15-minute window of the simulated market whose swings, after the first high and low, are all higher highs and higher lows (at least three of each).
Use itRead direction from the last two highs and the last two lows. Older swings are history.
Watch outA swing marked before the candles after it close is a guess, and guesses repaint.
What is a break of structure (BOS)?
A close beyond the last confirmed swing, in the direction structure already points. In an uptrend, a candle closes above the last swing high. The trend made a new high and held it to the close.
Simulated 15-minute candles, not market data. Swings are confirmed by 3 candles on each side.
Read as text
- A candle closes above the last swing high at 108.25: a break of structure (BOS).
- A new swing high at 108.42 is confirmed 3 candles later; it is the next level.
- A wick trades above 108.42, but every close stays at or below it: no break.
- A later candle closes above 108.42: that close is the BOS.
How this window was chosen: The first window in which a wick trades through the last swing high (a higher high) and closes back below it, and a later candle then closes above that same high, with no other break after it in the window.
Use itMark the last swing high before price gets there. Then wait for a candle to close above it.
Watch outA wick through the high is not a break. In the film it closed back below, and the break came later, from a close.
What is a change of character (CHoCH)?
The first close beyond a swing against the trend. In an uptrend, that's the first close below the last higher low. Below it, the uptrend's last defended level has failed.
Simulated 15-minute candles, not market data. Swings are confirmed by 3 candles on each side.
Read as text
- A close above the swing high at 101.76: BOS, the uptrend continues.
- A close above the swing high at 101.96: BOS, the uptrend continues.
- The last higher low sits at 101.54.
- A wick trades below 101.54 but the candle closes above it: no change of character yet.
- The first close below 101.54 is the change of character (CHoCH): the first break against the trend.
- The next close below a swing low, at 101.09, is a BOS again, now down.
How this window was chosen: The first window with two breaks of structure up, then a first close below a swing low, where that swing low was a higher low.
Use itIn an uptrend, one line matters most: the last higher low. A close below it is the CHoCH.
Watch outA CHoCH says the trend failed once. It doesn't promise a new trend; the next break decides that.
BOS vs CHoCH at a glance
| BOS | CHoCH | |
|---|---|---|
| Structure before it | already pointing this way | pointing the other way |
| The level | the last swing in the trend's direction | the last swing against it: the last higher low in an uptrend |
| What it tells you | the trend made a new extreme | the trend failed for the first time |
| What counts | a close beyond the level | a close beyond the level |
After a CHoCH, the next close beyond a swing in the new direction is a BOS again. That's how a downtrend's structure starts.
How do timeframes fit together?
Each leg on a higher timeframe is a whole trend on a lower one. One 4-hour leg up is, on 15-minute candles, an uptrend with its own breaks and pullbacks. One of those pullbacks is, on 5-minute candles, a small downtrend. Its CHoCH up is where the 5-minute chart turns back the 4-hour way.
Simulated candles, not market data: the 4-hour and 15-minute candles are built from the same 5-minute ones.
Read as text
- 4-hour chart: a higher low at 125.61 and a higher high at 130.44, one leg up.
- The same 96 fifteen-minute candles that make that leg break structure up 4 times: on 15 minutes the one leg is a whole uptrend, pullbacks included.
- One of those 15-minute pullbacks, on 5-minute candles, is a small downtrend: a break of structure down.
- Then a 5-minute close above its last lower high at 129.62: a change of character up, the 5-minute chart turning back the 4-hour way.
How this window was chosen: The first 4-hour up-leg (a higher low to the next swing high, a higher high that a 4-hour close broke out to) whose 15-minute candles break structure up at least three times, inside which a 15-minute pullback ends, on 5-minute candles, with a change of character up through a 5-minute lower high, closed no later than the 15-minute break.
Use itDirection from the 4-hour chart, the pullback on the 15-minute, the turn on the 5-minute.
Watch outA 5-minute CHoCH against the 4-hour trend is, on the 4-hour chart, still a pullback until a 4-hour candle closes beyond a 4-hour swing.
Swing or internal structure?
Same rule, different swing length. Long swings, say 20 candles a side, give you swing structure: the big legs. Short swings, 3 to 5 a side, give you internal structure: the moves inside a leg.
An internal CHoCH inside a swing uptrend is a pullback on the swing chart. The zoom film is the same idea across timeframes instead of swing lengths.
Common mistakes
- Counting a wick as a break. The close decides.
- Labelling a swing before it's confirmed. Until the candles after it close, it's a guess.
- Calling every CHoCH a reversal. It's the first failure, not a new trend.
- Mixing timeframes. A 5-minute CHoCH is not a 4-hour one.
- Changing the swing length mid-chart until the labels say what you hoped. Pick it once.
Which tools draw this?
See the labels on your own chart. Signal Desk is our free TradingView indicator that labels BOS and CHoCH with the rule on this page: confirmed swings, closed candles, CHoCH when the break goes against the last one. Switch its View preset to Pro to show the tags. Its swings use 5 candles a side by default, and structure is one of the five checks in its setup grade.
SMC Basics, also free, draws no BOS labels, but every order block it draws starts at one: the first close through a confirmed swing.
In its Full view, Advanced AIO v2 (paid, on our indicators page) labels swing highs and lows HH, HL, LH and LL, draws BoS and CHoCH on 20-candle swings, and marks breaks of internal structure on 5-candle swings. It breaks on the close by default.
Disclosure
We build Signal Desk and SMC Basics and give both away; we sell other indicators, including Advanced AIO v2. Nothing here is financial advice.
