Forex World Sri Lanka

📌 What is a BOS (Break Of Structure)?

In Smart Money Concepts (SMC) and ICT methodology, BOS (Break of Structure) is the definitive benchmark for trend persistence. A BOS occurs when price impulsively breaks through an established swing high or swing low in the direction of the dominant trend, establishing structural continuation.

🔄 The Two Types of BOS Formations

A valid BOS materializes on both the Bullish (Buy Side) and Bearish (Sell Side) spectrums:

1. Buy Side BOS (Bullish Break of Structure)

Occurs in an ongoing Up Trend when expanding price completely breaks through the previous structural High to print a new Higher High (HH).

Confirms that buyers remain in complete institutional control.
Requires the candle Body to close above the prior swing high.
Traders look for next high-probability long entries at the resulting Higher Low (HL) discount/demand zone.

2. Sell Side BOS (Bearish Break of Structure)

Occurs in an ongoing Down Trend when declining price completely breaks through the previous structural Low to print a new Lower Low (LL).

Confirms that institutional sellers maintain absolute dominance.
Requires the candle Body to close below the prior swing low.
Traders seek short entries on pullbacks into the newly generated Lower High (LH) supply zone.

⚖️ The Golden Rule: Candle Body vs. Wick Closure

Improperly identifying a BOS corrupts your entire market bias and leads to severe stop-outs:

✅ Valid BOS: The candle Body must decisively close beyond the previous swing high or low level.
❌ Invalid BOS (Liquidity Grab): If only the Wick pierces the level and retracts, it is a Stop Hunt / Liquidity Sweep, NOT a structural breakout.

🎯 Practical Execution Rule

Accurately mark BOS points on your chart to build a reliable market analysis and trading plan. Avoid trading lower-timeframe (1m/5m) sub-structure noise. Always align your trade setups with 1H / 4H swing BOS for maximum edge.

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