In an uptrend, which sequence defines the trend?

Higher highs and higher lows. An uptrend makes higher highs and higher lows.

A break of structure (BOS) is best described as:

A body close beyond the previous swing in the trend direction. BOS needs a candle body close beyond the previous swing, confirming continuation.

In an uptrend, a CHoCH happens when price:

Closes below the last higher low. The first close below the last higher low is the change of character.

Strategies School / ICT / Smart Money Concepts

Market Structure: BOS and CHoCH

Beginner · 8 min read

Read who is in control by tracking swing highs and lows, and learn the two signals that matter: break of structure and change of character.

What it is

Price moves in swings. In an uptrend it makes higher highs (HH) and higher lows (HL). In a downtrend it makes lower highs (LH) and lower lows (LL).

A break of structure (BOS) is a candle body closing beyond the previous swing in the direction of the trend. It confirms the trend is continuing.

A change of character (CHoCH) is the first close beyond the most recent opposite swing, for example a close below the last higher low in an uptrend. It is an early warning that control may be shifting, not a guarantee.

How to spot it

Mark the last two swing highs and swing lows on a higher timeframe (4H or 1H).
Trend is up while each low is higher than the one before. Stay on the long side.
When a candle closes below the last higher low, label it CHoCH and stop looking for longs.
Wait for a new structure to form before trading the other direction.

Trade plan

Entry: Trade pullbacks in the direction of the latest BOS, not the CHoCH candle itself.
Stop loss: Beyond the swing that must hold. If it breaks, the idea is wrong.
Target: The next swing high or low, or the opposite end of the range.

Common mistakes

Wrong: Calling every wick beyond a swing a break. Right: Require a candle body close beyond the level.
Wrong: Fighting the higher timeframe trend with lower timeframe signals. Right: Use the higher timeframe for direction, the lower one for entries.

Pro tip: Mark structure on 4H, then drop to 15m to time entries. Direction first, timing second.

Quiz

In an uptrend, which sequence defines the trend? Answer: Higher highs and higher lows. An uptrend makes higher highs and higher lows.
A break of structure (BOS) is best described as: Answer: A body close beyond the previous swing in the trend direction. BOS needs a candle body close beyond the previous swing, confirming continuation.
In an uptrend, a CHoCH happens when price: Answer: Closes below the last higher low. The first close below the last higher low is the change of character.

Educational content, not financial advice. Diagrams are illustrations, not real market data.