Trading strategies
Break of structure (BOS)
Definition
A close beyond the last swing in the trend's direction, such as above the last high in an uptrend. The trend continues.
Example
Suppose the last swing high in an uptrend is $112.00. A wick to $112.60 that closes at $111.80 is not a break of structure, but a later candle closing at $112.90 is, and the uptrend counts as continuing. Traders then watch the swing low that came before the break, say $108.50, since a close below it would be the first sign of trouble.
Hypothetical numbers, for illustration only.
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