KEY POINTS:

● The Break of Structure (BOS) stands as a pivotal trading

tool, denoting a shift in price momentum.

● It provides traders with the initial signal that the

prevailing trend is weakening, signaling an impending
reversal.

● Common tools for identifying a BOS encompass support

and resistance levels, trend lines, channels, and technical
indicators.

Profitable forex traders and professionals often base their

systems on the mantra "follow the trend."
 Identifying a trending market is straightforward when
there's a noticeable price rise or fall.

However, markets don't consistently exhibit clear trends,

with only 25% of the time showing distinct price movements.
The remaining 75% involves ranging or presenting
"hard-to-deduce" trends.

Fortunately, there's a reliable method for trend

identification—a mechanical model called Break of Structure
(BOS). This approach doesn't rely on indicators or trader
discretion.

In the subsequent sections, we will elucidate the

definition of Break of Structure, techniques for identification,
and strategies for trading based on this concept.

What Constitutes a Break of Structure in

Trading?

Typically, market trends progress in steps, avoiding a

perpetual straight upward or downward trajectory. Instead,
they unfold in waves of ascending and descending movements.
Uptrends, downtrends, and consolidations emerge as a result of
these price waves that encompass both upward and downward
motions.

Consequently, an uptrend is characterized by a sequence

of higher highs and higher lows, while a downtrend exhibits a
series of lower lows and lower highs. This structural pattern is
known as market structure. However, what transpires when
this established structure undergoes a rupture?
 A break of structure occurs when a higher high forms in an
uptrend without preceding the creation of a lower low, or when
a lower low emerges in a downtrend without first establishing a
higher high. Essentially, a break of structure denotes a shift in
price behavior and signifies a change in market momentum.