What is Break of structure (BOS)?
A break of structure is price closing beyond the most recent swing high or low in the direction of the existing trend, read as its continuation.
What does Break of structure (BOS) mean in practice?
A trend is described as a series of swings. In an uptrend, each swing high is higher than the last. When price closes beyond the previous swing high, that is a break of structure, taken as confirmation that the trend continues.
Everything hinges on how a swing is defined. A swing marked over five candles and one marked over twenty produce different structure on the same chart, and so different breaks. A rule has to state the swing length and whether a wick or a close counts.
A worked example
Illustrative only: with a swing high at 110 and a rule requiring a candle close above it, a candle closing at 110.6 is a break of structure. A wick to 110.6 that closes at 109.8 is not.
How to read or test it
State the swing definition as a number of candles on each side, and decide whether a close or a wick qualifies. Apply it to a long stretch of history and count how often a break was followed by continuation and how often by a reversal. Then change the swing length and see how much the answer moves. If the conclusion depends heavily on one swing setting, it is a property of the setting rather than the market.
How AKQX handles Break of structure (BOS)
AKQX provides structure-break detection with configurable swing definitions among its SMC blocks, so the same chart always produces the same answer.
See ICT and SMC algo builder for the feature page.
A common mistake
Counting wicks as breaks when the rule you tested required closes.
Educational only. This entry explains a term. It is not investment advice and does not recommend any trade, setting or strategy, and example numbers are illustrative, not results.
Related terms
Test the idea instead of taking it on trust
A free account includes 10 backtests a month and 1 paper algo, with no card and no broker connection.