Market Structure (BOS / CHoCH)¶
Structure · Smart Money
Detect Break of Structure and Change of Character events.
This block reads the language of market structure and labels the two events that matter most to smart-money traders: Break of Structure (BOS) and Change of Character (CHoCH). A BOS is continuation — price breaks the most recent swing in the direction of the existing trend, confirming it's still going. A CHoCH is reversal — price breaks a swing against the trend, the first sign the trend may be turning. Together they turn the squiggle of price into a readable narrative of who's in control.
How it works¶
Building on swing pivots detected over the Lookback N window (default 5), the block tracks the sequence of highs and lows. In an uptrend (higher highs and higher lows), price breaking above the last swing high is a bullish BOS (trend continues); price breaking below the last swing low — the structure that should have held — is a bearish CHoCH (character has changed, the uptrend is in question). The mirror logic applies in downtrends. Each detected event is emitted as a marker on the price pane, labelled by type and direction. Like all pivot-based tools, events confirm N bars after the swing that defines them — no lookahead.
When to use it¶
Use Market Structure events as the directional backbone of a smart-money strategy. The classic workflow: a CHoCH warns the trend may be reversing and shifts your bias; you then wait for a pullback into a Supply/Demand Zone or Fair Value Gap in the new direction, and use a subsequent BOS to confirm the new trend is underway before entering. BOS keeps you trading with structure; CHoCH keeps you from fighting a turn. It's a context and confirmation tool, not a standalone entry trigger.
Example¶
A CHoCH-then-BOS reversal: wire bars into Market Structure, let a bullish CHoCH flip your bias up, then require a confirming bullish BOS alongside price tapping a Supply/Demand Zone — combine through an And gate into a Buy Signal. Place the Structural Stop-Loss below the origin swing and backtest in the Tester.
Tips & gotchas¶
- BOS = continuation, CHoCH = reversal. Internalise the difference — it's the whole grammar of structure trading.
- CHoCH shifts bias; BOS confirms it. Use CHoCH to get ready, BOS to commit.
- Lookback sets the structure scale — small N reads minor (internal) structure, large N the major swings.
- Confirms N bars late — honest, no lookahead, but never the exact turn.
- Read it on the timeframe you trade, with the higher timeframe for bias.
Related blocks¶
Inputs¶
| Socket | Type | What to wire in |
|---|---|---|
| Bars | bars |
Price bars |
Outputs¶
| Output | Type | Plots as | Description |
|---|---|---|---|
| Events | events |
Event markers | BOS / CHoCH events |
Parameters¶
| Parameter | Type | Default | What it does |
|---|---|---|---|
| Lookback N | number · 2–30 | 5 |
Reference auto-generated from the block catalog · category Structure.