Break of structure (BOS)
Also called BOS. What it means, how it looks on a gold (XAUUSD) chart, and the mistake most traders make with it.
Break of structure: A break of structure happens when price takes out the previous swing high in an uptrend or swing low in a downtrend, confirming that the trend is continuing.
Break of structure on a gold chart
In an uptrend, gold makes a high at $4,124, pulls back to $4,108, then rallies through $4,124 to $4,136. The move above $4,124 is a bullish BOS. The pullback low at $4,108 now becomes the level that must hold for the trend to stay intact.
How traders use it
Traders use BOS to confirm trend direction on the higher timeframe, then buy pullbacks into discount (or sell rallies into premium) in that direction.
Common mistake
Counting wick breaks the same as body closes. Many traders only accept a BOS on a candle close; a wick above a high may be a liquidity sweep instead.
Questions
What does break of structure mean in trading?
A break of structure happens when price takes out the previous swing high in an uptrend or swing low in a downtrend, confirming that the trend is continuing.
How is break of structure used on gold (XAUUSD)?
Traders use BOS to confirm trend direction on the higher timeframe, then buy pullbacks into discount (or sell rallies into premium) in that direction.
Educational content, not financial advice. Every concept here is a probability, not a guarantee.
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