What it looks like
A swing high is a candle with lower highs on both sides of it, a local peak. In an uptrend the market makes higher swing highs and higher swing lows. A BOS up is the candle that closes (not just wicks) above the most recent swing high while that pattern is in place.
What it means
The trend is doing what a trend does: each push goes further than the last. Buyers are still in control and nothing has changed, and that is the point. It is a signal to stay with the trend, not to look for a top.
How to trade it
- 1
Confirm the market is already making higher highs and higher lows, and that a candle has closed above the last swing high.
- 2
Do not chase the break. Wait for a pullback towards the level that just broke and buy there.
- 3
Put the stop below the last swing low.
- 4
Target one to two times the stop distance, or the next ceiling above.
- 5
Example: on the US30 15 minute chart price closes above the last swing high, then pulls back to it. The last swing low is 60 points below your entry, so the stop is about 65 points away and the target 65 to 130 points.
A close back below the last swing low.
Where it works best
In clean, trending markets on 15 minute charts and higher, especially when the higher timeframe trend is also up.
WickSpeak finds the bullish break of structure automatically on any chart and names it on the candles that made it. It writes what it is, how to trade it and what proves it wrong right on the chart. Playbook can use it, or any of the 146 patterns, as a condition alongside up to 12 conditions on any of 12 timeframes, and backtest the play on past candles with your costs.
Common mistakes
- Buying the breakout candle itself instead of waiting for the pullback.
- Counting a wick above the swing high as a break: it needs a close.
- Placing the stop just under the broken level instead of below the last swing low.
Related patterns
Questions traders ask
What is a break of structure in trading?
It is a close beyond the last swing point in the direction of the trend. A bullish BOS is a close above the last swing high in an uptrend. It says the trend is carrying on.
What is the difference between BOS and CHoCH?
A BOS is a break in the same direction as the trend, so it confirms it. A change of character (CHoCH) is the first break against the trend and warns it may be ending.
Should you buy the break of structure candle?
Usually not. The better entry is a pullback towards the level that just broke, with the stop below the last swing low.
What cancels a bullish break of structure?
A close back below the last swing low. That breaks the higher lows the uptrend relied on.