BOS vs CHoCH: break of structure and change of character
Both terms describe price breaking a swing point. What differs is the direction of the break compared with the trend.
Break of structure (BOS)
A break in the direction of the trend. In an uptrend, price closes above the last swing high. It confirms that the trend is still in place.
Change of character (CHoCH)
The first break against the trend. In a downtrend, price closes above the last lower high. It is an early sign that the trend may be turning, not a proof.
See both
The first chart shows a break of structure in a new uptrend.
Structure
Price makes a swing low, bounces to a swing high, then pulls back without breaking the low.
Break of structure
A strong rally closes above the last swing high. That break is the first sign that the structure has turned bullish.
Fair value gap
The rally is so fast that the high of the candle before it and the low of the candle after it never overlap. The gap between them is the FVG.
Order block
The last down candle before the rally. Many SMC traders treat this zone as the place where larger orders entered.
Retest
Price returns through the gap into the order block, then continues higher. This is one possible path, not a rule. Measuring how often it happens is what this site is about.
The second shows a downtrend that turns: equal lows get swept, then the last lower high breaks. That break is the change of character.
Downtrend
Price makes lower highs and lower lows, so the structure is bearish. The last lower high is the level to watch.
Equal lows
Several lows form at almost the same price. Many traders keep their stops just below them, so liquidity builds up there.
Liquidity sweep
Price dips below the equal lows, triggers those stops, and closes back above them. The long lower wick is the footprint.
Change of character
The rally breaks the last lower high. It is the first break against the trend, so the character of the market changes.
Retest
Price pulls back into the fair value gap left by the rally, then continues higher. One possible path: how often it works has to be measured.
Details that change the result
- Close or wick? A wick through a level can be a liquidity grab rather than a break. Many traders only count a candle close.
- Which swing counts? Decide which swings matter, for example the ones on your structure timeframe. The break of a tiny internal swing says little.
- Timeframe. A change of character on M5 can be a normal pullback on H4. That is why the higher timeframe usually sets the bias.